Infosys Q1 Profit Up 8.7% to ₹6,921 Cr; FY26 Guidance Revised on Strong Deals

IT services giant Infosys on Wednesday reported an 8.7% year-on-year rise in net profit to ₹6,921 crore for the quarter ending 30 June 2025, up from ₹6,368 crore in the same period last year. The company also posted a 7.5% year-on-year increase in revenue for Q1 FY26, reaching ₹42,279 crore. A Bloomberg survey of brokerages had estimated Infosys’ net profit at ₹6,778 crore and revenue at ₹41,724 crore.

Infosys shares closed 0.8% lower at ₹1,558.9 on the NSE ahead of the earnings announcement.

Operating profit for the quarter stood at ₹8,803 crore, reflecting a 6.2% increase. The operating margin was 20.8%, slightly down from 21.1% a year ago. Earnings per share (EPS) rose 8.6% year-on-year to ₹16.70. Free cash flow declined 17.7% year-on-year to ₹7,533 crore but still represented 108.8% of net profit.

The company secured large deals worth $3.8 billion during the quarter, with 55% of these being net new contracts. CEO and MD Salil Parekh attributed the strong performance to the firm’s enterprise AI capabilities and successful client consolidation strategies.

"Our performance in Q1 demonstrates the strength of our enterprise AI capabilities, the success in client consolidation decisions, and the dedication of our over 300,000 employees,” said Parekh. “Our large deal wins of $3.8 billion reflect our distinct competitive positioning and deep client relationships,” he added.

“Q1 performance is a clear reflection of our unwavering focus on multiple fronts resulting in strong growth at 2.6% QoQ, resilient margins at 20.8%, and an EPS increase of 8.6% YoY. We continue to leverage Project Maximus to make investments in strategic priorities to drive profitable growth and enhance shareholder value,” said Jayesh Sanghrajka, CFO of Infosys.

“Cash flow conversion was well above 100% for the fifth consecutive quarter. The impact of currency volatility was effectively managed through our proactive hedging strategy,” he added.

Among industry verticals, manufacturing posted the highest growth with a 14.8% year-on-year rise in constant currency terms. This was followed by energy, utilities, resources, and services at 7.2%, and financial services at 6.3%. Revenue from life sciences declined by 6.6%.

In terms of geography, Europe led the growth with a 16.2% year-on-year rise in constant currency. North America remained largely flat, growing just 0.5%. Despite the slowdown, North America contributed 56.5% of Infosys’ total revenue in Q1 FY26, down from 57.1% in Q4 FY25 and 58.9% in Q1 FY25. India accounted for 2.9% of the company's revenue.

For the full financial year FY26, Infosys raised its revenue growth guidance to 1–3% in constant currency, narrowing the range from its earlier forecast of 0–3%. The company maintained its operating margin guidance at 20–22%.

CEO Salil Parekh said the company revised the lower end of its guidance based on a stable yet cautious global economic outlook. “With the current outlook, where we’ve seen many of the discussions in the economy worldwide moving towards stability — but not fully stable — we have narrowed the guidance,” he explained.

Infosys’ total headcount at the end of the quarter stood at 323,788, slightly up from 323,578 in the previous quarter. The company also reported a slight increase in its voluntary attrition rate (LTM – IT Services), which rose by 30 basis points to 14.4%. CFO Sanghrajka noted that wage hikes rolled out in April had a 100-basis-point impact on margins.