Infosys Reports Q1 Earnings: IT Leader Achieves Net Profit of Rs 6,921 Crore
India’s second-largest IT services firm, Infosys, has reported a consolidated net profit of ₹6,921 crore for the first quarter of the current financial year, marking a 9% increase compared to the same period last year. The company’s operational revenue also saw an uptick, rising 8% year-on-year to ₹42,279 crore. In light of these results, Infosys has adjusted its revenue growth forecast upward, now projecting a growth range of 1-3% in constant currency for FY26. CEO Salil Parekh attributed the company’s strong performance to its enterprise AI capabilities and solid client relationships.
Key Financial Metrics
In the first quarter, Infosys achieved a revenue growth of 3.8% year-on-year and 2.6% quarter-on-quarter in constant currency terms. The company secured contracts worth $3.8 billion, with 55% of these contracts representing new business. Gross profit for the quarter increased to ₹13,055 crore, up from ₹12,138 crore in the same quarter last year. The operating margin stood at 20.8%, reflecting a slight decrease of 0.3% year-on-year and 0.2% quarter-on-quarter. Infosys expects to maintain its operating margin within a range of 20-22% throughout FY26.
Segment Performance
Analyzing the performance across various divisions, financial services led with a 5.6% growth in constant currency year-over-year. The manufacturing sector showed significant expansion at 12.2%. However, the retail segment saw minimal growth of 0.4%, while the hi-tech sector experienced a slight increase of 1.7%. In contrast, the life sciences division faced a decline of 7.9%, and other segments contracted by 15.3% in constant currency terms. To enhance profitability and returns for stakeholders, Infosys continues to implement its Project Maximus strategy.
Cash Flow and Workforce Insights
The company reported robust free cash flow of $884 million for the quarter, with cash flow conversion exceeding 100% for the fifth consecutive quarter. CFO Jayesh Sanghrajka highlighted that the impact of currency fluctuations was effectively managed through a proactive hedging strategy. The voluntary attrition rate saw a slight increase to 14.4%, up from 14.1% in the previous quarter. Despite this, the workforce remained stable at 323,788 employees compared to the end of the previous financial year. Following the announcement of these results, Infosys shares closed 0.8% lower at ₹1,558.9 on the National Stock Exchange.
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