Infosys on Wednesday reported a 2%year-on-year decline in third quarter net profit at ₹6,654 crore, compared with ₹6,806 crore in the corresponding period a year ago.
The company’s revenue grew 8.89% to ₹45,479 crore compared to ₹41,764 crore in Q3 FY25.
The firm also reported a ₹1,289 crore exceptional charge in its Q3 earnings on account of the statutory impact of new labour codes; representing an increase in gratuity liability, leave liability etc. Infosys, as of now, expects a recurring impact of this change at 15bps p.a.
However, enthused by strong market momentum, encouraging deal pipelines and an uptick in AI projects, Infosys has revised its FY26 revenue guidance upward to a range of 3-3.5% from the earlier forecast of 2-3%. Yet, the firm maintained its operating margin guidance in the range of 20-22%.
Salil Parekh, CEO and MD Infosys in hismarket commentary said, “We are seeing a good demand outlook overall with a large pipeline of deals and strong momentum in AI adoption across segments. We are seeing good growth in financial services, energy and utility sectors and good demand environment across the spectrum.”
On AI growth he said, the company had been witnessing strong momentum across clients and verticals. “Today,we work with 90% of our largest 200 clients to unlock value with AI. Currently, we work on 4,600 AI projects. We are also witnessing six AI-led value pools emerging that could unlock a largeincremental opportunity,” Mr. Parekh said.
Clients were increasingly viewing Infosys as their AI partner with demonstrated expertise, innovation capabilities and strong delivery credentials and this had helped them unlock business potential and enhanced value realisation, he added.
In Q3, the company witnessed a TCV (total contract value) of large deals (26 deals) worth $4.8 billion, with net new of 57%. It also reported an adjusted free cash generation at $965 million.
Addressing a press conference here on Wednesday, Jayesh Sanghrajka, CFO, said, “Our performance was broad-based in Q3 with 0.6% sequential revenue growth, 0.2% adjusted operating margin expansion, stellar large deal wins at $4.8 billion and robust adjusted free cash generation in a seasonally weak quarter.”
In line with the company’s capital allocation policy, it completed the largest ever buyback of ₹18,000 crore and paid out interim dividend to shareholders, during the quarter, he said.
Shubham Rathore, Principal Analyst at Gartner said, Infosys’s Q3 results underscored operational resilience, with revenue up 1.7% year-on-year in constant currency and a healthy operating margin of 18.4%. Large deal wins of $4.8 billion and robust free cash flow reflected the company’s ability to deliver value amid a dynamic market.
“Despite macroeconomic headwinds and evolving client priorities, Infosys’s focus on digital, cloud, and AI innovation positions it to support clients’ transformation journeys and sustain momentum in a rapidly evolving technology landscape,” he added.
According to Mr. Rathore, Gartner’s latest IT spending forecast shows global enterprise IT spend rising over 10% in 2026, fueled by demand for AI-optimised infrastructure and services.
Responding to a query on the company’sM&A focus, Mr. Parekh said, “We have a good pipeline of possible companies, we are in discussions and we also have the strong support of the balance sheet. So our M&A strategy is not different from earlier.”
On pricing environment, Mr. Sanghrajka said, multiple pricing models, including outcome-based, were evolving in the marketplace, and everybody was testing new pricing models.’’
In Q3, Infosys saw its headcount increase by 5,043. The company already hired 18,000 freshers this year and was on track to onboard 20,000 in FY26, it said. Attrition declined to 12.3% from 13.7% in the previous quarter and 14.3% on a last-twelve-month basis. “An increase in headcount demonstrates that we have confidence where the market is and where we are seeing demand,” Mr. Parekh added.
Published – January 14, 2026 08:13 pm IST
