Infosys Q1 FY26: Strong start with 3.8% CC growth and USD 3.8B deals

Infosys reported a consolidated revenue of USD 4,941 million, marking a 4.8% year-on-year (YoY) increase in reported currency and a robust 3.8% in constant currency (CC) terms. Sequentially, constant currency revenue grew by 3.3% in Indian rupees, revenue stood at Rs. 42, 279 crore, up 7.5% YoY.

The company’s net profit for the quarter rose to USD 809 million, reflecting an 8.6% YoY growth. This strong bottom-line performance came despite a slight moderation in operating margins, which stood at 20.8%, down 0.3% YoY and 0.2% sequentially, though still comfortably within the company’s guided range.

A significant highlight of the quarter was the impressive USD 3.8 billion in large deal total contract value (TCV), with 55% of these being net new deals. It maintained its focus on operational efficiency. The voluntary attrition rate (LTM basis) saw a slight uptick to 14.4% from 14.1% in the previous quarter, indicating continued demand for skilled talent in the IT sector. The company’s total headcount remains stable at 323,788, with a net addition of 210 employees.

Buoyed by the strong Q1 performance, Infosys revised its FY26 constant currency revenue growth guidance, raising the lower end from 0% to 1%, while retaining the upper end at 3%. The operating margin guidance for FY26 remains unchanged at 20%-22%.

Nevertheless, analysts largely viewed Infosys's Q1 FY26 performance positively. Firms like CLSA noted that Infosys "ticked all the right boxes," while Bonanza advised long-term investment given the strong deal pipeline, focus on Generative AI, and strategic acquisitions. Infosys stood out amongst its peers, being the only company among the top four Indian IT firms to report sequential revenue growth in constant currency for the quarter.