Infosys jumps 4% after Q3 results beat and guidance upgrade – should investors buy?

Mumbai | January 16

Shares of Infosys climbed around 4% in early trade on Friday after the company announced its Q3 FY26 results and upgraded its revenue growth guidance post market hours on Wednesday.

The stock opened sharply higher after its American Depositary Receipts (ADRs) surged nearly 10% on Wall Street overnight. In the domestic market, Infosys had closed 0.62% higher at ₹1,608.90, ahead of the earnings announcement.

Q3 performance beats expectations

Infosys delivered a resilient performance in a seasonally weak quarter.
Revenue in constant currency terms grew 0.6% quarter-on-quarter and 1.7% year-on-year, beating expectations of flat growth. The performance was aided by a pick-up in discretionary spending and ramp-up of large deals during the quarter.

In rupee terms, revenue rose to ₹45,479 crore, up 8.9% YoY and 2.2% higher than previous quarter.

Operating performance remained steady despite cost pressures. Adjusted EBIT margin stood at 21.2%, broadly in line with estimates, while reported margins came in at 18.4%. The company disclosed a one-time labour code impact of ₹1,289 crore during the quarter.

Net profit, however, declined 9.7% year-on-year to ₹6,654 crore, compared with ₹7,365 crore in the corresponding quarter last year.

Deal momentum provides visibility

Large-deal momentum remained a key positive, with total contract value (TCV) of $4.8 billion in Q3, including two mega deals. Net new deals accounted for 57% of the total, supporting medium-term revenue visibility.

Deal wins increased sharply from $3.1 billion in the previous quarter, aided in part by a large contract from NHS UK.

Infosys also reported its highest headcount in 11 quarters, adding 11,246 employees over the last two quarters, signalling capacity build-up to support future growth.

Guidance raised, deal momentum strong

Infosys raised its FY26 constant currency revenue growth guidance to 3–3.5%, from the earlier range of 2–3%, citing steady execution and improving demand visibility.

The company maintained its EBIT margin guidance at 20–22% for FY26, indicating confidence in margin stability despite ongoing investments and regulatory costs.

PL Capital View

PL Capital maintains a BUY rating on Infosys with a target price of ₹1,900, citing improved revenue visibility, strong deal wins, and early signs of recovery in discretionary spending. The brokerage believes healthy deal momentum, growing AI-led opportunities, and a stable margin outlook provide a solid foundation for better growth in FY27.

Read the full report for detailed insights here.

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