Infy vs Maruti Q2 FY26

IN

Infy

Q2 FY26 · Diversified

Infosys delivered a strong Q2 FY26 with constant currency revenue growth of 2.9% YoY and sequential operating margin expansion of 20 bps to 21%. Large deal TCV was robust at $3.1 billion with 67% net new, and a subsequent $1.6 billion mega deal was announced. Growth was driven by financial services and manufacturing, while AI-related projects (2,500+ generative AI, 200+ agentic) are scaling. Management raised FY26 revenue guidance to 2-3% CC, maintaining margin guidance of 20-22%. Key risk: persistent macro uncertainty and tariff-related headwinds could elongate decision cycles and pressure discretionary spending.

Guidance read

FY26 revenue growth guidance raised to 2-3% CC: Revised from previous range; reflects strong H1 performance and includes seasonal H2 softness. Operating margin guidance maintained at 20-22%: Margin guidance unchanged despite revenue guidance revision; Project Maximus and cost levers support. Mega deal with NHS worth $1.6B to ramp up this fiscal year: 100% net new deal announced post-Q2; expected to contribute to H2 revenue. Versant JV expected to close this fiscal year: Pending regulatory approvals; last year revenue AUD 210M; not included in guidance.

Risk read

Key risks include Macro uncertainty and tariff risks — Geopolitical tensions and tariff uncertainties are causing elongated decision cycles and pressure on discretionary spending, especially in retail and manufacturing.; H1B visa fee hike impact on delivery model — Analyst raised concern about visa cost increases; management acknowledged potential model shift but provided no specific quantification of margin impact.; AI deflationary pressure on revenue growth — Analyst questioned whether AI-driven productivity gains could compress revenue; management noted cost reduction focus but did not quantify net impact.; Seasonal H2 softness — Lower working days, furloughs, and calendar effects expected to impact H2 growth; guidance reflects this but could be worse if macro deteriorates..

Promise ledger

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

Maruti Suzuki reported Q2 FY26 net sales of INR 40,130 crore (+12.8% YoY) and net profit of INR 3,290 crore (+7.5% YoY). Domestic volumes declined 5.1% due to pre-GST cut deferrals, but exports surged 42.2% to 110,487 units. Festive retail sales doubled to 400,000 units (vs 211,000 last year), with small cars growing 30% in October. Management guided for 6% industry growth in H2 and expects to exceed the export target of 400,000 units. The company reiterated its aspiration of 50% market share and 10% EBIT margin, supported by eight new SUV launches by 2030-31. Key risk: sustainability of the small car recovery given deferred sales and festive euphoria.

Guidance read

Industry growth of 6% in H2 FY26: Management expects overall industry growth of about 6% year-on-year in the second half and beyond. Exports to exceed 400,000 units in FY26: Given H1 exports of over 200,000 units, management expects to exceed the full-year export guidance of 400,000 units. Eight new SUV launches by 2030-31: Global President announced eight more SUVs to be launched in India by the turn of the decade, excluding Victoris and eVITARA. Aspiration of 10% EBIT margin and 50% market share: Management reiterated the goal of achieving 10% EBIT margin and 50% market share, as set by Suzuki Motor Corporation.

Risk read

Key risks include Sustainability of small car recovery — The strong festive retail sales may include deferred purchases and festive euphoria; sustainability is uncertain.; Margin pressure from discounting and mix — Higher sales promotion expenses (75 bps) and price corrections (20 bps) impacted margins; small car recovery could pressure blended margins.; Forex and commodity headwinds — Forex (JPY) and commodities (PGM) together adversely impacted margins by 30 bps; hedging gains are non-operating.; Market share recovery challenges — Global President noted that reaching 50% market share is more difficult than ever, despite product launches..

Promise ledger

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