Infosys Q3 Results: ADR Jumps Over 8% After Strong Earnings, Higher FY26 Revenue Guidance
New York-listed shares of Infosys Ltd. surged over 8% on Wednesday after India’s second largest IT firm announced its third quarter results and lifted its fiscal 2026 revenue guidance. The American Depository Receipt (ADR) of Infosys gained as much as 8.6% to $19.03 as of 8:18 p.m. India time.
The ADR is a tool for multinationals/foreign companies (primarily based outside the US) or organisations to trade on US stock markets, just like regular shares of US companies. In theory, an ADR is similar to a special certificate issued by a US bank. It is a negotiable certificate representing shares in a foreign company traded on US stock exchanges.
Revised Guidance for FY26
Infosys revised its guidance for FY26 revenue growth to 3.0%–3.5% in constant currency terms from 2%–3% earlier and operating margin to 20%-22%. This revision is a testament to the company’s strong performance in the third quarter, driven by its differentiated value propositions in enterprise AI, through Infosys Topaz.
According to CEO and MD Salil Parekh, ‘Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share.’ He further added, ‘Clients increasingly view Infosys as their AI partner with demonstrated expertise, innovation capabilities and strong delivery credentials. This has helped them unlock business potential and enhanced value realization.’
Strong Q3 Performance
Consolidated net profit fell nearly 10% to Rs 6,654 crore in the October-December quarter, compared to the preceding quarter, according to a stock exchange filing on Wednesday. Infosys had to provision Rs 1,289 crore as a one-time cost to comply with new labour codes notified by the government late last year.
Revenue was up 2.2% at Rs 45,479 crore versus Rs 44,490 crore (Bloomberg estimate: Rs 45,204 crore). EBIT was up 1.3% at Rs 9,479 crore versus Rs 9,353 crore (Bloomberg estimate: Rs 9,558 crore). EBIT margin was at 20.8 % versus 21.02% (Bloomberg estimate: 21.14%). Profit was down 9.6% at Rs 6,654 crore versus Rs 7,364 crore (Bloomberg estimate: Rs 7,397 crore).
The total contract value (TCV) of large deal wins was $4.8 billion, with net new of 57%, a statement said. CFO Jayesh Sanghrajka stated, ‘Our performance was broad-based in Q3 with 0.6% sequential revenue growth, 0.2% adjusted operating margin expansion, stellar large deal wins at $4.8 billion and robust adjusted free cash generation at $965 million in a seasonally weak quarter.’
Attrition and Hiring
Infosys has taken 18,000 freshers so far in FY26, according to the CFO. This move is expected to help the company reduce attrition rates and improve its talent pool. Amid the dip in attrition, the company is focusing on enhancing its employee value proposition and providing opportunities for growth and development.
Stock Market Performance
Shares of Infosys closed 0.75% higher at Rs 1,609.9 on the BSE, ahead of the results, compared to a 0.3% decline in the benchmark Sensex. The stock has fallen 17% in the last 12 months. With the strong Q3 results and revised guidance, the company’s stock is expected to perform well in the coming days.
For investors looking to invest in the Indian IT sector, Infosys and other major players like TCS and Wipro are worth considering. It is essential to keep an eye on the company’s performance, guidance, and industry trends to make informed investment decisions.
Conclusion
In conclusion, Infosys’ Q3 results and revised guidance for FY26 are a positive sign for the company and the Indian IT sector as a whole. With its strong performance in artificial intelligence offerings and robust large deal wins, the company is well-positioned for growth in the coming years. As the Indian economy continues to grow, the demand for IT services is expected to increase, providing opportunities for companies like Infosys to expand their operations and increase their market share.
Investors looking to invest in the Indian stock market can consider investing in stocks like Infosys, which have a strong track record of performance and growth. However, it is essential to do thorough research and analysis before making any investment decisions. With the right strategy and knowledge, investors can navigate the Indian stock market and achieve their financial goals.
