IT major Infosys is scheduled to announce its Q3 earnings on January 14. The Street will watch out for five key factors, including restructuring expenses due to the new labour codes, the company’s commentary on guidance, dividend announcement, and the deal pipeline.

Here’s a detailed look at the five key factors to watch ahead of the earnings:

#1 Restructuring expenses due to new labour codes

Jefferies, in its report, noted that India’s new labour codes could lead to a one-time impact of 10–20% on profits in Q3FY26, while also pushing up recurring employee costs by as much as 5%. However, it added that Infosys may see the lowest impact due to its superior margin profile.

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#2 FY26 guidance in focus

In Q2FY26, Infosys management raised its FY26 constant currency (CC) revenue growth guidance to 2–3% from the earlier 1–3%, reflecting cautious optimism on the improving demand environment, while maintaining its operating margin guidance in the 20–22% band.

#3 Investors await dividend announcement

Infosys, in its BSE release announcing the earnings date, did not mention any dividend announcement for the quarter. However, investors may be keenly awaiting clarity, as the company had announced an interim dividend of Rs 23 per share in the previous quarter.

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#4 Deal pipeline

In the previous quarter, large deal TCV stood at $3.1 Bn, with 67% being net new. Deven Choksey, in its report, said it estimates Infosys to post revenue of Rs 44,965.9 crore in Q3FY26, up 7.7% YoY, driven by AI-led digital transformation, large-deal ramp-ups including the $1.6 Bn mega deal, and strength in Financial Services and Manufacturing, aided by vendor consolidation and improving discretionary spend.

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#5 FY26 Revenue growth 

Axis Securities Equity Research expects Infosys to report revenue growth of 2.7% quarter-on-quarter (QoQ), driven by deal ramp-ups. However, furloughs and lower working days are likely to keep growth modest. EBIT margins are expected to remain flat sequentially, supported by the company’s cost optimisation programme, Project Maximus.