Infosys Q3 FY26 Results Analysis: Revenue Growth, Deal Wins, Guidance and AI Strategy

Infosys Q3 FY26 results highlight how India's large-cap IT services companies are navigating steady demand, temporary margin pressures and accelerating artificial intelligence adoption in a cautious global technology spending environment.

This analysis is written for long-term investors, equity researchers and market participants tracking quarterly earnings, guidance trends and competitive positioning within the Indian IT sector, offering clear insight into Infosys' earnings quality, deal visibility and positioning against peers such as Tata Consultancy Services and HCL Technologies.

Table of Contents:

1. Infosys Q3 FY26 Results Overview
2. Infosys Q3 FY26 Financial Highlights
3. Revenue, Profitability and Margins Explained
4. FY26 Guidance Upgrade and Management Outlook
5. Deal Wins, AI Strategy and Operational Metrics
6. Market Reaction and Peer Comparison
7. What Infosys Q3 FY26 Results Mean for Investors
8. Key Risks to Track Going Forward
9. Conclusion
10. FAQs on Infosys Q3 Results

Infosys Q3 FY26 Results Overview

Infosys reported a steady Q3 FY26 performance, supported by healthy revenue growth and strong deal momentum despite a cautious global IT spending environment.

• Revenue growth remained stable across key markets, reflecting steady client demand.

• Profitability was affected by a one-time regulatory charge, while the core business continued to perform well.

• Margins stayed within the guided range, supported by disciplined cost management.

• The company upgraded its full-year revenue guidance, signalling better demand visibility.

• Strong large-deal wins and AI-led engagements continue to support long-term growth.

Infosys Q3 FY26 Financial Highlights

Infosys announced its Q3 FY26 results on 14 January 2026, reporting steady top-line growth while profitability was temporarily impacted by a one-time regulatory charge.

Key consolidated numbers

These Infosys Q3 Results highlight operational strength despite short-term earnings noise.

Revenue, Profitability and Margins Explained

Revenue performance

• Consolidated revenue increased 2.2% quarter-on-quarter and 8.9% year-on-year.

• Constant currency growth stood at 1.7% YoY and 0.6% QoQ, signalling steady client demand across geographies.

Impact on profitability

• Net profit declined 2% YoY due to an exceptional charge of Rs 1,289 crore related to Labour Code compliance.

• Profit before tax grew 8.8% YoY, highlighting underlying business strength.

Margin discipline

• Adjusted operating margin remained at 21.2%, well within management guidance.

• EBIT growth of 8.5% YoY reflected cost control despite regulatory and wage-related pressures.

FY26 Guidance Upgrade and Management Outlook

A key positive from Infosys Q3 FY26 results was the upward revision in full-year revenue guidance.

Updated FY26 outlook

Want to evaluate how the market has responded to Infosys’ earnings and guidance upgrade? Check the latest Infosys share price, updated charts, and key valuation ratios to assess its current stock performance.

Management commentary highlighted:

• Improved demand visibility across large clients.

• Temporary Q4 softness due to furloughs rather than structural slowdown.

• Acceleration expected in FY27, driven by BFSI recovery and AI-led transformation programmes.

Deal Wins, AI Strategy and Operational Metrics

Large deal momentum

• Large deal total contract value reached $4.8 billion.

• About 57% of deals were net new.

• A $1.6 billion engagement with the National Health Service improved long-term revenue visibility in Europe.

AI-led growth

• Infosys Topaz continued to play a central role in deal conversions.

• Clients are increasingly adopting generative AI to enhance productivity and automate processes.

Workforce and cash flow

• Voluntary attrition declined to 12.3%, down 140 basis points YoY.

• Free cash flow remained strong at $915 to $965 million.

• The company completed an Rs 18,000 crore buyback and interim dividend in line with its capital allocation policy.

Market Reaction and Peer Comparison

Market response

• Infosys ADRs surged nearly 10% in US markets post-results.

• Indian-listed shares were expected to open higher following the guidance upgrade.

Relative performance

• Infosys outperformed Tata Consultancy Services on revenue growth in Q3 FY26.

• Analysts noted broad-based performance across verticals, with select metrics ahead of HCL Technologies.

• At current valuations, Infosys is viewed as attractively placed given its deal momentum and AI strategy.

Want to understand how sector-wide IT sentiment compares with Infosys’ company-specific performance? Track movements in Nifty IT to assess broader market momentum.

What Infosys Q3 FY26 Results Mean for Investors

The Infosys Q3 FY26 results analysis highlights several important takeaways for long-term investors:

• The profit decline is non-recurring and does not weaken the core investment thesis.

• Upgraded revenue guidance improves confidence in FY26 execution.

• Strong deal wins enhance earnings visibility into FY27.

• AI-first offerings strengthen Infosys' competitive position among global IT peers.

Overall, Infosys continues to suit investors seeking large-cap IT exposure with a balance of stability and next-generation growth drivers.

Key Risks to Track Going Forward

• Slower-than-expected recovery in discretionary IT spending.

• Prolonged global macroeconomic uncertainty.

• Short-term margin volatility due to seasonality and wage costs.

Despite these risks, the deal pipeline and AI traction provide downside support.

Conclusion

Infosys Q3 FY26 results show steady business performance, supported by revenue growth and an improved full-year guidance. Although profit was impacted by a one-time regulatory charge, the core business remains strong. Healthy deal wins, growing AI-led projects and lower employee attrition point to a solid growth pipeline for FY26 and beyond.

With better demand visibility, stable margins and performance ahead of key peers, Infosys continues to stand out among large-cap IT companies. For investors, the stock offers exposure to long-term digital and AI growth at reasonable valuations.

Also, read the detailed breakdown of Infosys’ previous quarterly performance through the Infosys Q2 FY26 Results analysis to assess earnings consistency.

FAQs on Infosys Q3 Results

1. What was Infosys' revenue growth in Q3 FY26?
Infosys reported consolidated revenue of Rs 45,479 crore in Q3 FY26, marking a year-on-year growth of 8.9%.

2. Why did Infosys' net profit decline in Q3 FY26?
Net profit declined due to a one-time Labour Code-related charge amounting to Rs 1,289 crore, rather than any weakness in core operations.

3. Did Infosys revise its FY26 revenue guidance?
Yes, Infosys upgraded its FY26 constant currency revenue growth guidance to a range of 3% to 3.5%, reflecting improved demand visibility.

4. How strong is Infosys' deal pipeline after Q3 FY26 results?
Large deal total contract value stood at $4.8 billion, with more than half of the contracts coming from net new business wins.

5. How is artificial intelligence contributing to Infosys' growth?
Infosys Topaz is enabling enterprise clients to adopt generative AI at scale, improving productivity and supporting large deal conversions.