Infy vs Grasim 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.

Grasim reported a strong Q3 FY26 with consolidated revenue of INR 44,312 crore (+25% YoY) and EBITDA of INR 6,215 crore (+33% YoY), driven by robust performance across building materials, financial services, and core businesses. Birla Opus paints gained 300 bps revenue market share YoY, with volume up 70% YoY, and the B2B platform Birla Pivot crossed an INR 8,500 crore annualized run rate, ahead of its FY27 guidance. The chemicals business saw stable demand, while the renewables and financial services segments posted strong growth. Management maintained its target of INR 10,000 crore revenue for Birla Opus by FY28 and guided for breakeven at Birla Pivot by FY27 exit. Key risks include sustained discounting pressure in the paints industry and potential margin compression from raw material volatility in chemicals.

Guidance read

Birla Opus revenue target of INR 10,000 crore by FY28: Management reiterated achieving INR 10,000 crore revenue in the third full year of operations (FY28). Birla Opus profitability target within three years: Targeting to become a profitable number two player within three years of full-scale operation. Birla Pivot breakeven by FY27 exit: Birla Pivot expects to exit FY27 at breakeven level. Renewable energy share target of 40% in chemicals by FY27: Targeting renewable energy share in chemicals to reach over 40% by end of FY27.

Risk read

Key risks include Paints industry discounting pressure — Industry revenue growth lags volume growth due to high discounting and focus on low-value segments, which could pressure realizations.; Epoxy margin compression from raw material volatility — Management noted they avoided low-margin LER volumes due to margin squeeze; ECH price volatility could impact profitability.; Dealer churn and collection risks in paints — Analyst raised concerns about dealers stopping business; management acknowledged active dealer rates of 70-75% and focus on collections.; Cheap imports impacting cellulosic fashion yarn — Subdued performance in cellulosic fashion yarn due to cheaper imports from China creating oversupply..

Promise ledger

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