Infosys' Q2 FY26 revenues showed strong performance, growing 2.2%/2.9% QoQ/YoY in CC terms, driven by increased market share gains. Financial services (+5.4% YoY), Manufacturing (+6.6% YoY), Communication (+ 4.7% YoY) and Hi-tech (8.6% YoY) along with Europe (+6.3% YoY) & India (+6.8% YoY) backed the overall growth. Infosys revised its full-year revenue growth guidance to 2% to 3% in constant currency.
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IDBI Capital Report
Infosys Ltd. reported a steady but cautious performance in Q2 FY26, showcasing strong execution despite a weak demand environment. Revenue rose 2.2% sequentially and 2.9%YoY in CC term, crossing $5 billion.
Operating margin improved to 21%, supported by better efficiency under Project Maximus and stronger pricing. The company secured $3.1 billion in large deals (67% net new) and announced an additional $1.6 billion megadeal after the quarter, reflecting continued client trust.
Free cash flow was healthy at $1.1 billion, equal to 131% of net profit, while attrition dropped to 14.3%.
Infosys continued advancing its “AI-first” vision, executing over 2,500 generative AI projects and 200 agentic AI deployments through its Topaz platform. However, slow discretionary spending, longer deal cycles, and modest FY26 growth guidance of 2–3% suggest limited near-term momentum.
While maintaining our long-term positive outlook, we reiterate our rating to Buy with a revised the target price to Rs 1,714 (23x FY27E EPS), factoring in the current challenges such as tariffs, geopolitical tensions, sentiments related to H1B visa and trade barriers.
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Also Read: Wipro Q2 Review — Dolat Capital Maintains 'Reduce' Rating; Sees No Significant Triggers In Near-Term
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