Infosys Q3 Results: ADR Jumps Over 8% After Strong Performance and 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 ADR is and how it works. American Depository Receipt 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.
What is an American Depository Receipt (ADR)?
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. This allows Indian companies like Infosys to raise capital in the US markets and provides US investors with an opportunity to invest in foreign companies.
Infosys Q3 Results: Key Highlights
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 and large deal wins.
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.
Large Deal Wins and Freshers Recruitment
Infosys took 18,000 freshers so far in FY26, according to the CFO, amid a dip in attrition. 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.
Financial Performance and Market Reaction
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).
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.
Conclusion and Future Outlook
Infosys’ strong Q3 performance and higher FY26 revenue guidance are positive indicators for the company’s future growth. The scaling of its artificial intelligence offerings and large deal wins are expected to drive revenue growth and increase market share. However, the company’s financial performance was impacted by the one-time cost to comply with new labour codes, which affected its net profit.
As the Indian IT sector continues to evolve, companies like Infosys are focusing on digital transformation and emerging technologies like artificial intelligence to drive growth. For investors, it’s essential to keep an eye on the company’s future performance and guidance to make informed investment decisions.
