Infosys lifts growth floor amid steady deal wins

Investing.com -- Infosys raised the lower end of its annual revenue guide as it reported a small top-line beat in the September quarter, helped by steady deal wins and good demand from financial clients, though operating margins came in softer.

The Bengaluru-based company reported revenue of $5.08 billion for the quarter ended Sept. 30, up 2.9% from a year earlier and slightly ahead of the $4.98 billion analysts had expected.

Earnings per American Depositary Share stood at 20 cents, in line with estimates. Operating margin was 21%, down from 21.4% that analysts were looking for.

Infosys said revenue in constant currency rose 2.2% sequentially, marking its second consecutive quarter of growth. Large deal wins came in at $3.1 billion, with 67% of that net new business.

Free cash flow was $1.1 billion, or 131% of net profit.

The company narrowed its fiscal 2026 revenue growth outlook to 2%–3% in constant currency, from 1%–3% previously, while retaining its margin forecast of 20%–22%. The change effectively raises the lower bound of growth expectations while leaving the upper end unchanged.

Company said that it has been narrowing the range upwards despite external environment remaining uncertain.

“Strong deal wins…reflect our deep understanding of clients’ priorities to deliver value from AI in this environment," said CEO Salil Parekh.

"Our proactive investments, over the last three years, in embracing an AI-first culture within Infosys has ensured that our people are reskilled to thrive in a human+AI workplace" 
 
Analysts at Bank of America called the results steady, with bookings broadly matching the prior quarter and the guidance shift in line with expectations.

Jefferies highlighted the $3.1 billion in deal signings as healthy, though noted a sharp uptick in hiring, with headcount rising by more than 8200 in the quarter. It could be a for volume-led growth.

Morgan Stanley said the implied growth in the second half of the year looks softer compared with the first six months, and investors may seek clarity on the outlook.

Infosys’ move to lift its growth floor follows a similar pattern seen at peers HCLTech and Tech Mahindra, which have kept their guidance ranges steady, though Tech Mahindra has tempered its longer-term expectations.