Infosys is set to announce its financial results for the first quarter of FY26 today, with brokerages anticipating a steady performance supported by strong deal wins, a recovering BFSI segment, and continued focus on generative AI investments. While seasonal tailwinds and improved tech spending are expected to aid revenue growth, margin pressures from wage hikes and acquisitions could act as short-term headwinds.
Infosys Q1 preview: 5 key things to watch
1. Large deal win: Brokerages expect Infosys’s deal momentum to be a key growth driver for Q1FY26, with strong large deal ramp-ups and a robust pipeline seen as critical to the company’s performance and outlook.
2. BFSI vertical Outlook: According to brokerages the BFSI segment is turning into a bright spot for Infosys, with early signs of recovery in tech spending. Positive cues from US banks and steady deal wins are supporting the outlook.
3. Margin Levers: In Q1FY26, Infosys’s margin levers are expected to face a mix of headwinds and tailwinds, according to brokerages. While acquisitions and wage hikes are likely to put pressure on profitability in the near term, operational efficiency programmes and favourable macro factors are expected to support margins, helping the company stay within its guided range of 20–22 per cent for FY26.
4. Generative AI adoption: Infosys’s continued investment in generative AI is emerging as a key long-term growth driver, with brokerages highlighting it as a strategic focus area in their Q1FY26 previews.
5. FY26 Guidance: The brokerages also highlighted the need to monitor pricing trends, the assumptions behind growth estimates, and any strategic updates on cost-control initiatives, along with Infosys’s guidance and comments on demand visibility in the first half of FY26.
Infosys set to outperform in Q1FY26, led by BFSI recovery: Anand Rathi
According to Anand Rathi, Infosys is expected to deliver a strong performance in the first quarter of FY26. The brokerage highlighted early signs of recovery in the IT sector, particularly in the BFSI (banking, financial services, and insurance) segment, which is emerging as a bright spot across global and Indian IT players.
“Infosys, along with LTIM, Mphasis, and Intellect Design, is well positioned to outperform peers in Q1FY26,” Anand Rathi noted. “Positive earnings commentary from major US banks and steady deal wins by Infosys and Mphasis reflect the improving tech spending outlook in the sector.”
Axis Securities expects Infosys revenue to grow 2.6% QoQ
Axis Securities expects Infosys to post strong revenue growth of 2.6% QoQ in the first quarter of FY26, driven by increased working days and a rebound in the BFSI segment.
However, profit margins may face some pressure during the quarter. “We also expect operating margins to fall by 120 bps aided by a wage hike for senior staff and acquisition costs for MRE Consulting and Missing Link. onsite expenses,” the brokerage said. Rising onsite costs are also expected to weigh on profitability.
The brokerage expects Infosys to raise its revenue growth guidance for FY26 to 1–3 per cent from the earlier range of 0–3 per cent. “The guidance may be revised upward, signalling a more optimistic outlook as deal momentum picks up,” Axis Securities noted.
The company’s strong deal pipeline, ongoing cost optimisation strategies, and continued investments in generative AI and digital transformation are seen as long-term growth drivers.
Infosys likely to tweak revenue growth guidance for FY26: Equirus Securities
Equirus Securities expects Infosys to deliver a modest performance in the April-June quarter of FY26, despite seasonal tailwinds. The brokerage projects a 3.4 per cent sequential rise in US dollar revenue, with constant currency (CC) growth at 1.4 per cent. This includes an estimated 0.3 per cent contribution from inorganic growth.
Equirus also anticipates that Infosys may slightly revise its full-year guidance for CC revenue growth to 1.0–3.25 per cent from the earlier 0–3 per cent range. The revision would reflect the added impact of acquisitions. However, the company is likely to maintain its EBIT margin guidance of 20–22 per cent for FY26.
Infosys’s EBIT margin for Q1FY26 is projected to dip marginally by 10 basis points to 20.9 per cent. This slight decline is attributed to wage hikes for senior executives and normalised costs following write-backs in the previous quarter. Equirus noted, “We expect EBIT margins to remain broadly stable due to cost optimisation measures and currency benefits, even though wage increases may weigh slightly.”
Infosys Q4FY25- A recap
Infosys reports subdued Q4FY25 with profit decline
Infosys posted a mixed set of numbers for the fourth quarter of FY25. While the company’s revenue rose by nearly 8 per cent year-on-year to Rs 40,925 crore, its net profit dropped 11.7 per cent to Rs 7,033 crore compared to the same quarter last year.
Operating margins for Q4 stood at around 21 per cent. The company reported large deal wins worth $2.6 billion in Q4, taking the full-year total to $11.6 billion across 96 deals. About 56 per cent of these were net new contracts.