Key Points:
- Infosys Q3 profit slips 2.2% year-on-year to ₹6,654 crore due to a one-time labor cost adjustment under new labor codes.
- Revenue grew 9% annually, leading Infosys to raise its full-year growth forecast to 3%–3.5%.
- Strong deal wins worth $4.8 billion and lower attrition supported a positive outlook.
Infosys Q3 profit slips as Infosys reported a 2% annual drop in third-quarter profit on Wednesday due to a one-time labor cost adjustment, while raising its full-year revenue growth forecast as demand improved across key business segments.
Profit Falls Despite Revenue Growth
Infosys Q3 profit slips as Infosys Ltd., India’s second-largest IT services exporter, posted a net profit of ₹6,654 crore for the October-December quarter, down 2.2% from a year earlier, according to an exchange filing. Profit also fell 9.6% sequentially from the previous quarter.
The decline was largely driven by a one-time charge of ₹1,289 crore linked to the implementation of new labor codes announced by the government in November. The adjustment increased gratuity and leave-related liabilities from past service costs.
“The adjustments for Labor Codes represent an increase in gratuity liability arising out of past service cost and an increase in leave liability, together by $143 million,” the company said in its filing.
Revenue from operations rose 9% year over year to ₹45,479 crore, compared with ₹41,764 crore in the same period last year. Sequentially, revenue increased 2.2% from ₹44,490 crore.
In constant currency terms, revenue grew 1.7% annually and 0.6% from the previous quarter, reflecting steady client spending despite a mixed global technology outlook.
Company Raises Full-Year Growth Guidance
Infosys Q3 profit slips even as Infosys raised its revenue growth guidance for the current financial year to a range of 3% to 3.5%, up from its earlier forecast of 2% to 3%. It maintained its operating margin guidance at 20% to 22%.
The company said demand remained resilient in its core sectors. Financial services accounted for 28.2% of total revenue during the quarter, followed by manufacturing at 16.7%.
Energy, utilities, resources, and services contributed 13.2%, while retail and communication segments made up 12.8% and 12.1%, respectively.
Salil Parekh, chief executive officer and managing director, said the company’s performance reflected stronger positioning in emerging technology-led deals.
“Infosys delivered a strong Q3 performance, demonstrating how our differentiated value propositions are consistently driving higher market share,” Parekh said. He added that clients increasingly see Infosys as a long-term partner for digital and automation initiatives.
Deal Wins, Hiring Support Outlook
Infosys Q3 profit slips while the company reported large deal wins with a total contract value of $4.8 billion, with net new deals accounting for 57% of that figure. The company said deal momentum remained strong across banking, healthcare and telecommunications.
Infosys expanded its workforce by 5,043 employees in the quarter. Attrition fell to 12.3%, down from 14.3% in the previous quarter and 13.75% a year earlier, signaling improved employee retention.
Parekh said workforce development remained a priority as the company adapts to evolving client needs. “Central to this journey is our commitment to reskill, transform and empower our dedicated human resource pool,” he said.
Key deals during the quarter included an expanded partnership with Metro Bank to modernize finance operations, a collaboration with the NHS Business Services Authority in England and Wales, and a technology engagement with Telenor Shared Services to upgrade human resources systems.
Infosys Q3 profit slips as Infosys shares closed at ₹1,640 on the National Stock Exchange on Wednesday, gaining 1.72% after the results were announced. The stock had ended 0.62% higher earlier in the day ahead of the earnings release.
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