Infosys Q2 FY26 Results: Net Profit Climbs 13%, Revenue Up Strong, Guidance Raised
Bengaluru/New Delhi, October 16, 2025 — Infosys Ltd, one of India’s leading IT services companies, posted a robust performance in the second quarter of FY 26, with a 13.2% year-on-year net profit increase and healthy growth across service lines. The company also adjusted its revenue guidance upward following strong deal momentum and resilient demand in digital transformation.
Here’s a detailed look at the quarter’s numbers, business drivers, and what to watch ahead.
Financial Highlights & Key Metrics
| Metric | Q2 FY26 | YoY Change | Notes / Observations |
|---|---|---|---|
| Net Profit | ₹7,364 crore | ↑ ~13.2% | Compared to ₹6,506 crore in Q2 FY25 |
| Revenue from Operations | ₹44,490 crore | ↑ ~9% | Reflects solid growth across verticals |
| Operating Margin | ~21% | ~Stable | Margins held steady despite cost pressures |
| Large Deal TCV (Total Contract Value) | US$3.1 billion | — | 67% of large deals were net new |
| Revenue Growth Guidance (Full Year) | 2%–3% (raise from 1%–3%) | Upward revision | Reflects confidence in stronger demand |
Infosys also announced an interim dividend of ₹23 per equity share for the quarter.
Business Drivers & Strategic Insights
Deal Wins & Mix
A notable highlight was the strength in large deals. Infosys reported US$3.1 billion in Large Deal TCV during the quarter, with 67% being net new contracts. Such wins across financial services and manufacturing verticals contributed significantly to revenue momentum.
Moreover, growth across five verticals and a 2% uptick in North America revenue helped offset softness elsewhere.
Margins and Cost Control
Despite rising costs and macro pressures, Infosys was able to maintain margins at ~21%. Operating discipline, expense control, and favorable currency movements helped cushion margin headwinds.
Guidance Adjustment & Market Sentiment
Buoyed by better-than-expected Q2, Infosys raised the lower bound of its full-year revenue guidance to 2%–3% from 1%–3% earlier. This signals confidence in demand resilience and deal pipeline visibility. However, uncertainties remain given global macro challenges.
Challenges, Risks & Watch Points
- Deal timing & execution risk: A lot depends on ramping up new deals and converting pipeline into execution without delays.
- Cost pressures & wage inflation: Keeping expenses in check will remain a balancing act, especially with competitive wage pressures in IT.
- Macro / external headwinds: Global economic uncertainty, client discretionary spending slowdowns, changes in U.S. tech regulations or visa policies could weigh.
- Margin sustainability: Maintaining current margins while scaling revenue will test operating leverage.
Outlook & What to Watch in Q3 / FY26
- Deal ramp-up and revenue execution: The trajectory of Q3 will depend on how quickly new contracts start contributing.
- Margin trends: Whether margin pressures intensify or remain stable as cost and currency dynamics evolve.
- Guidance for FY26: Whether further upward revisions are possible if conditions remain favorable.
- Geographic / vertical mix: Shifts in growth between North America, Europe, and new geographies will be key.
- Tech trends & innovation adoption: Performance in artificial intelligence, cloud, digital transformation initiatives will be differentiators.
Conclusion
Infosys Q2 FY26 results reflect a strong quarter powered by deal momentum, revenue growth, and controlled costs. The upward revision of guidance reinforces optimism in sustained demand. Yet, execution, margin pressure, and macro uncertainties remain key levers for future performance. Investors and industry watchers will be keen to see how Infosys navigates the coming quarters in a volatile global environment.
