Infosys Q4FY26 results: Record deal wins fail to lift cautious FY27 revenue guidance

Mumbai | 24 April 2026 

Infosys ended FY26 with USD 20.2 billion in annual revenue, up 3.1% year on year in constant currency terms. The final quarter disappointed on the top line, with Q4 revenue declining 1.3% quarter on quarter in constant currency, against an estimated decline of 0.6%, as seasonal softness and delayed client decision-making in March weighed on results. 

What did Infosys report for Q4FY26? 

Infosys reported Q4 IT services revenue of USD 5.04 billion, down 1.2% quarter on quarter in USD terms. Overall rupee revenue stood at INR 464 billion, in line with estimates. Adjusted net profit came in at INR 85.1 billion, up 11.6% quarter on quarter, ahead of estimates, driven by a lower effective tax rate of 21.2% against an estimated 29%. 

The EBIT margin held at 21.0%, down 20 basis points quarter on quarter. Headwinds included acquisition-related amortisation of approximately 50 basis points, normalisation of prior one-offs at 30 basis points, and compensation costs at 20 basis points. Currency tailwinds of around 40 basis points and Project Maximus efficiencies partially offset these pressures. 

Which segments dragged Q4 revenue? 

Manufacturing was the weakest vertical, declining 5.9% quarter on quarter, reflecting cautious client behaviour amid tariff uncertainty and softer demand. Financial Services fell 1.9% quarter on quarter, while Energy, Utilities, Resources and Services and Retail each declined 1.2%. Both North America and Europe contracted 1.5% quarter on quarter. 

Hi-Tech and Communications were the only verticals to grow, rising 2.9% and 1.3% quarter on quarter respectively. 

How strong were Infosys deal wins in FY26? 

Deal momentum was the standout positive. Infosys closed FY26 with large deal total contract value of USD 14.9 billion, up approximately 24% year on year, with a net-new component of 55%. The full year saw 96 large deal wins, including three mega deals. 

Q4 large deal TCV stood at USD 3.24 billion, down 33% quarter on quarter from USD 4.8 billion in Q3, comprising 19 deals with a net-new mix of approximately 40%. 

PL Capital Research analysts Pritesh Thakkar and Sujay Chavan note that net-new large deal TCV for FY26 reached USD 8.2 billion, up 24% year on year, a figure that appears misaligned with the growth anticipated in the FY27 guidance range. 

Why is the FY27 guidance conservative? 

Infosys issued FY27 organic revenue guidance of 1.5–3.5% year on year in constant currency, with EBIT margin maintained at 20–22%. The guidance absorbs approximately 75–100 basis points from a planned ramp-down with a large European manufacturing client and a further 40–50 basis points from right-shoring optimisation. Absent these two factors, each would have contributed additionally to FY27 growth. 

Management reaffirmed that Financial Services and Energy, Utilities, Resources and Services are expected to contribute substantially to topline growth, supported by notable large wins, with 80% of ER&U net-new TCV comprising new business. 

What is the outlook on margins and hiring? 

Infosys plans to add 20,000 freshers in FY27. The company continues to invest in sales and marketing and in hiring and reskilling talent for AI-led work. Thakkar and Chavan expect margins to remain in a tight band, as these investments are partly offset by Project Maximus efficiencies. 

AI deal momentum is accelerating across productivity automation, platform modernisation, legacy migration and IT operations, with Infosys differentiating through its Topaz platform. AI engagements carry premium pricing, though higher specialised talent costs partially offset margin benefits. 

For FY26, Infosys reported an adjusted EBIT margin of 21.0%, down 10 basis points year on year. 

Read the full PL Capital Research report on Infosys Q4FY26: https://plindia.com/ResReport/INFO-24-4-26-PL.pdf 

Stay updated on Indian equity and commodity markets. Read more market news on PL Capital.