Infosys Misses FY25 Guidance, Outlook For FY26 Remains Muted

Infosys Ltd.'s outlook for fiscal 2026 remains muted as it guides for 0-3% revenue growth, expecting a soft start to the financial year amid uncertainties brought on by the tariff wars.

Net profit rose 3% sequentially to Rs 7,033 crore in the quarter ended March 31, 2025, which is higher than the Rs 6,697-crore estimate shared by analysts tracked by Bloomberg.

The revenue declined 2% over the previous three months to Rs 40,925 crore in the March quarter, according to an exchange filing on Thursday. That compares with the Rs 42,126-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue down 2% at Rs 40,925 crore (Estimate: Rs 42,126 crore).

• Net profit rose 3% to Rs 7,033 crore (Estimate: Rs 6,697 crore).

• EBIT down 3.8% at Rs 8,575 crore versus Rs 8,912 crore (Estimate: Rs 8,696 crore)

• EBIT margin 21% versus 21.3%. (Estimate: 20.63%)

The IT major missed its fiscal 2025 guidance, which was raised by it from 3.75%-4.5% to 4.5-5% in the preceding quarter. However, the actual revenue growth for the financial year came in at 4.2%.

The management said that two third of the decline was on the back of lower third party cost and revenue, while adding that the March quarter has been seasonally weak. This resulted in the guidance miss.

"We see uncertainty in the environment," Chief Executive Officer Salil Parekh said, but added that several deals closed last quarter are moving into "appropriate phases".

The company is expected to see some impact in the consumer sector, while momentum continues in energy, utilities and BFSI segment. Infosys would watch out to see any changes in the macro-environment, the CEO noted.

The large deal total contract value came in at $2.6 billion in the March quarter, marginally higher than $2.5 billion recorded in the third quarter. The same for the whole year stood at $11.6 billion.

The company's free cash flow was at $4,088 million, marking an increase of 41.8% year-on-year.

Commenting on the guidance given for fiscal 2026, Jayesh Sanghrajka, chief financial officer at Infosys said, “We have a three point guidance at the bottom, middle and top end. The fact that we have a three-point guidance reflects there is uncertainty in the environment. At the bottom end of the guidance, we have baked in some deterioration in the environment, and some heightened uncertainty. At the top end of the guidance, we have assumed a steady-to-marginally improving environment at this point in time.”

The total employee count at the end of the year is 323,578 employees, with an addition of 199 employees in the fourth quarter. Attrition inched up 14.1% higher than 13.7% recorded in the last quarter. Sanghrajka said that the company plans to hire 20,000 freshers and says it remains on track with the wage hikes.

The CEO, commenting on the recent fresher layoffs, said that the company has a rigorous way to train and assess. Every time a training batch comes in they have three opportunities to be tested. If they succeed they are in, and if not, then the company helps them find opportunities outside, he added.

The quarterly results were declared after the market hours. Shares of Infosys had settled 0.51% higher at Rs 1,420.2 apiece on the BSE, compared to 1.96% advance in the benchmark Sensex.