Infy vs Bajajfinsv Q3 FY26

IN

Infy

Q3 FY26 · Diversified

Infosys delivered a strong Q3 FY26 with constant currency revenue growth of 1.7% YoY and adjusted operating margin of 21.2%, expanding 20 bps sequentially. Large deal TCV was robust at $4.8 billion with 57% net new, including a $1.6B NHS deal. The company raised FY26 revenue guidance to 3%-3.5% (from 2%-3%), while maintaining margin guidance of 20%-22%. Growth was driven by Financial Services and Energy/Utilities, where discretionary spending is returning and AI adoption is accelerating. Management sees FY27 growth acceleration in these two verticals. AI momentum is strong with 4,600 projects and 500 agents built. Risks include tariff uncertainties impacting Manufacturing and Retail, and potential compression in legacy services due to AI-led productivity.

Guidance read

FY26 revenue growth guidance raised to 3%-3.5% CC: Infosys raised its constant currency revenue growth guidance for FY26 from 2%-3% to 3%-3.5%. FY26 operating margin guidance maintained at 20%-22%: Operating margin guidance remains unchanged at 20%-22% for FY26. Growth acceleration in Financial Services and EURS in FY27: Management expects growth in Financial Services and Energy, Utilities, Resources, and Services verticals to accelerate in FY27 over FY26.

Risk read

Key risks include Tariff uncertainties impacting Manufacturing and Retail — Manufacturing and Retail/CPG verticals are impacted by tariff uncertainties, delaying client decisions and pressuring discretionary spend.; AI-led productivity compressing legacy services — AI-driven productivity benefits may compress legacy service revenues, though management sees net positive from new AI opportunities.; Potential contract attrition from Daimler — Analyst raised concerns about press reports of Daimler moving away; management noted current contracts valid till Dec 2026 but did not provide specifics..

Promise ledger

Of 3 tracked promises, management 0 met, 0 close, 3 missed.

Bajaj Finserv reported a strong Q3 FY26 with consolidated total income up 24% YoY to INR 39,708 crore and PAT (before exceptional items) up 32% YoY to INR 2,936 crore. The life insurance business delivered its highest-ever VNB of INR 405 crore (+59% YoY) with NBM expanding to 19% (vs 15.1% last year), driven by the successful Bajaj Life 2.0 strategy. General insurance maintained a healthy combined ratio of 97.9% (vs 101.1% last year), though underwriting loss widened due to labor code impact and upfront acquisition costs. Lending subsidiaries BFL and BHFL posted robust AUM growth of 22% and 23% respectively. The Allianz stake buyout was completed, strengthening group control. Guidance points to continued margin expansion in life insurance and resumption of revenue growth at Bajaj Markets from Q4. Key risk: motor OD loss ratios remain elevated due to pricing pressure and GST-related IDV reduction, which may persist if industry pricing correction is delayed.

Guidance read

Life insurance VNB margin expansion to continue, but taper: Management expects margin expansion to continue but at a slower pace due to base effects; GST impact pushed back margin targets by 2-3 quarters. Bajaj Markets revenue growth to resume from Q4 FY26: Revenue growth expected to resume from Q4 onwards after software migration to SFDC is completed in Q3. Bajaj Finserv AMC to launch AIF and PMS by end FY27: Plans to start alternative investment funds and portfolio management services targeting high-net-worth clients, subject to regulatory approvals. Bajaj Life setting up pension fund and GIFT City branch: Process of regulatory approvals initiated for a pension fund management business and a branch in GIFT City.

Risk read

Key risks include Motor OD loss ratio elevated due to pricing pressure and GST impact — Motor own-damage loss ratios remain high across the industry due to IDV reduction from GST and rising repair costs; pricing correction may take time.; Life insurance persistency dips across cohorts — Persistency ratios declined in line with industry trends; management acknowledged the issue and is working on it, but it could pressure future renewal premiums.; General insurance underwriting loss widened despite improved combined ratio — Underwriting loss increased to INR 137 crore from INR 43 crore last year, impacted by labor code charge and higher acquisition costs on new business.; Competition intensity in fire and commercial lines leading to pricing softness — Fire insurance pricing has softened due to good loss ratios and no major catastrophes, which could pressure margins if loss ratios revert..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.