Infosys Ltd., India’s second-largest IT services company, announced strong Q1 FY26 results for the quarter ending June 30, 2025. The company delivered healthy revenue growth, better-than-expected profit, steady margins, and a sharp increase in new deal wins.
This performance was well-received by the market, with Infosys shares and ADRs both showing positive movement.
Infosys Financial Performance Shows Steady Growth
Infosys reported a revenue of ₹42,279 crore ($4.89 billion), marking an 8% year-on-year increase. This growth was in line with analysts’ expectations and shows continued demand across multiple business segments.
Net profit rose nearly 9% YoY to ₹6,921 crore, beating the average analyst estimate of ₹6,755 crore. On a percentage basis, net profit increased approximately 8.7%, showing strong profitability despite macroeconomic challenges.
The company’s operating margin stood at 20.8%, slightly lower than last year but still within its guided range of 20–22%. Meanwhile, earnings per share (EPS) climbed around 5.8% YoY to $0.20 (₹16.70), reinforcing the company’s consistent shareholder value creation.
Business Momentum Driven by Large Deal Wins
One of the standout highlights of the quarter was Infosys’ total contract value (TCV) of net new bookings, which surged to $3.8 billion. This is a significant jump from $2.6 billion in the previous quarter, indicating strong demand for digital transformation services.
In terms of sector performance, the Manufacturing segment grew the fastest (up 12–14% in constant currency), followed by Financial Services (6–7%) and Energy/Utilities. However, the Life Sciences vertical saw weaker growth.
Geographically, Europe led the charge with 12–16% growth, while North America remained mostly flat, growing at just about 0.5%. The contrast suggests Infosys is diversifying its revenue base effectively beyond its largest market.
Guidance Raised, Strong Free Cash Flow Supports Growth
Infosys has revised its full-year FY26 revenue guidance, increasing it to a growth range of 1–3% in constant currency—up from the earlier 0–3%. The margin guidance remains unchanged at 20–22%.
Free cash flow stood at $884 million (~₹7,533 crore), with an impressive cash conversion ratio of 109%, indicating healthy operational efficiency.
Management commentary was optimistic, with CEO Salil Parekh and CFO Nilanjan Roy highlighting momentum in enterprise AI, proactive cost controls, and strong execution on large deals as key drivers of this quarter’s success.
Market Reaction & ADR Surge Post-Results
Infosys shares in India rose by around 0.8% ahead of the results announcement, showing investor optimism. Following the results, Infosys’ ADRs listed on the New York Stock Exchange surged over 3%, closing at $18.50 after trading in the range of $17.90 to $18.82.
The positive reaction reflects investor confidence in the company’s earnings quality, deal pipeline, and raised outlook. With Infosys being a key player in India’s tech sector, its performance sets the tone for the broader IT industry.
Conclusion
Infosys has delivered a solid Q1 performance with notable profit growth, strong deal momentum, and an upgraded revenue outlook. While margins slightly dipped, they remain within the guided band, showing the company’s ability to manage costs in a competitive environment. Market response has been encouraging, with shares and ADRs gaining post-announcement. Overall, Infosys starts FY26 on a confident note, backed by growth in digital demand, especially in financial services and enterprise AI.
F.A.Q.
– What was Infosys’ net profit in Q1 FY26?
Infosys reported a net profit of ₹6,921 crore in Q1 FY26, marking a ~9% year-on-year increase and beating analysts’ expectations of ₹6,755 crore.
– How much revenue did Infosys generate in Q1 FY26?
Infosys posted ₹42,279 crore ($4.89 billion) in revenue, which is an 8% growth YoY, supported by strong performance in manufacturing, financial services, and energy sectors.
– What are Infosys’ new deal wins for the quarter?
The total contract value (TCV) of net new bookings reached $3.8 billion, a sharp jump from $2.6 billion in Q4 FY25, reflecting strong demand for digital transformation services.
– What is the revenue guidance for Infosys in FY26?
Infosys upgraded its FY26 revenue growth guidance to 1–3% in constant currency, up from the earlier estimate of 0–3%. Margin guidance remains unchanged at 20–22%.
– How did the market react to Infosys’ Q1 results?
Infosys shares in India closed up ~0.8% before the results, and ADRs (INFY) on the NYSE surged over 3%, closing at around $18.50 post-announcement, reflecting positive investor sentiment.
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