Infosys Q3 Results: Revenue Rises 3.2%, FY26 Growth Outlook Raised on Strong Deal Wins
Strong quarterly performance lifts investor sentiment
Infosys delivered a resilient performance in the December quarter, reporting better-than-expected revenue growth and raising its full-year outlook, supported by robust large deal wins and improving demand visibility. The company’s performance stood out in comparison to some of its larger peers, helping boost investor confidence.
Following the announcement, Infosys shares surged sharply in early trade on overseas exchanges, reflecting optimism around the company’s upgraded guidance and execution strength.
Revenue growth beats expectations
For the third quarter, Infosys reported revenue of $5 billion, marking a 3.2% year-on-year increase in dollar terms. On a sequential basis, revenue rose 0.5%, highlighting steady momentum despite a challenging global macro environment.
In constant currency terms, the company posted 0.6% quarter-on-quarter growth and 1.7% growth compared to the same period last year. This performance was stronger than some industry peers, underlining Infosys’ relative execution strength during the quarter.
Peer comparison
- One major peer reported 0.8% growth in constant currency terms but saw a 2.6% year-on-year decline.
- Another large IT services company delivered comparatively stronger numbers with 4.2% quarter-on-quarter and 4.8% year-on-year growth.
FY26 revenue guidance upgraded
Infosys revised its revenue growth guidance for FY26 to a range of 3%–3.5%, signaling improving confidence in demand conditions and deal execution. Earlier, the company had already raised the lower end of its growth outlook for the current financial year to 2%–3%, from the earlier 1%–3% range.
The management attributed this upward revision to better execution, strong deal momentum, and improving decision-making by clients across key sectors.
Large deal wins drive optimism
Large deal wins during the quarter stood at a solid $4.8 billion, with 57% coming from net-new deals. This indicates stronger client confidence and faster deal conversions, which are critical drivers for future revenue growth.
The company also highlighted improving traction in segments such as financial services and energy, utilities, and resources, which supported overall performance during the quarter.
Margins impacted by exceptional charge
Infosys maintained its operating margin guidance for FY26 at 20%–22%. However, margins for the December quarter came under pressure. Operating margin declined to 18.4%, down 2.6% sequentially and 2.9% year-on-year.
The decline was partly due to a one-time exceptional charge of Rs 1,289 crore, related to the implementation of the revised labour code during the quarter.
Outlook remains constructive
Management commentary pointed to increasing confidence in demand trends, supported by strong deal activity and the company’s growing role as a strategic technology and AI partner for large global clients. This positive outlook has strengthened expectations for a more stable growth trajectory heading into the next financial year.
Overall, Infosys’ Q3 performance and upgraded guidance suggest improving business momentum, positioning the company favorably amid a gradually recovering global IT spending environment.
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