Infosys ADR Jumps Over 8% After Q3 Results, 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. To understand the significance of this jump, it’s essential to know what an American Depository Receipt (ADR) is.
What is an American Depository Receipt (ADR)?
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.
Infosys Q3 Results and Revised Guidance
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 significant indicator of the company’s confidence in its future performance, driven by its artificial intelligence offerings.
Executives said the company has scaled its artificial intelligence offerings to clients in foreign markets. “Infosys delivered a strong Q3 performance demonstrating how our differentiated value propositions in enterprise AI, through Infosys Topaz, are consistently driving higher market share,” said CEO and MD Salil Parekh.
“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,” he added.
Infosys Hiring and Attrition
Infosys has taken 18,000 freshers so far in FY26, according to the CFO, amid a dip in attrition. This move is part of the company’s strategy to build a strong talent pool to support its growth plans.
Q3 Financial 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).
Large Deal Wins and Cash Generation
The total contract value (TCV) of large deal wins was $4.8 billion, with net new of 57%, a statement said. “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” said CFO Jayesh Sanghrajka.
Stock Market Reaction
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.
For investors looking to understand the implications of these results on their investment portfolio, it’s crucial to consider the broader trends in the Indian stock market and how companies like Infosys are navigating the challenges and opportunities in the sector.
