Large Deal TCV
$3.8B
+44% QoQ
Total contract value of large deals signed in Q1, with 55% net new.
INFY
Other
10 Jul 2025
Infy Ltd — Q1 FY26
Infosys delivered a strong Q1 FY26 with constant currency revenue growth of 3.8% YoY and 2.6% QoQ, driven by broad-based growth across industries and geographies.
✓ Verified against BSE filing
2-Min Summary
Infosys delivered a strong Q1 FY26 with constant currency revenue growth of 3.8% YoY and 2.6% QoQ, driven by broad-based growth across industries and geographies. Large deal TCV was robust at $3.8 billion with 55% net new, including a mega deal with a global bank. Operating margin came in at 20.8%, down 30bps YoY due to compensation hikes and sales investments, partly offset by Project Maximus benefits. Management revised FY26 revenue guidance to 1%-3% CC (from 0%-3%), citing persistent macro uncertainty and no improvement in client discretionary spending. AI adoption is accelerating, with 300 agents built and strong pipeline in enterprise AI. Key risk: delayed decision-making and tariff uncertainty could further pressure H2 growth.
Key Numbers
Headcount
323,788
flat QoQ
Headcount remained flat sequentially; utilization improved 30bps to 85.2%.
Attrition
14.4%
+0.3pp QoQ
Attrition increased marginally to 14.4% from 14.1% in Q4.
Free Cash Flow
$884M
109% of net profit
Free cash flow was 109% of net profit, 5th consecutive quarter above 100%.
Management Guidance
FY26 revenue growth guidance revised to 1%-3% CC
Revised from 0%-3% to 1%-3% in constant currency, reflecting strong Q1 but persistent macro uncertainty.
revenueOperating margin guidance maintained at 20%-22%
Margin guidance unchanged; aspiration to improve margin YoY despite headwinds from compensation and deal ramp-ups.
marginsFY26 free cash flow expected above 100% of net profit
Continued strong cash generation; 5th consecutive quarter of FCF >100% of net profit.
otherKey Risks
Macro uncertainty and tariff impact
Persistent tariff and geopolitical uncertainty are delaying client discretionary spending and elongating decision cycles.
high · management_commentaryH2 seasonality and demand weakness
Management expects H1 to be stronger than H2 due to normal seasonality, implying potential growth deceleration.
medium · management_commentaryAI-driven productivity may cap pricing
Productivity gains from AI are shared with clients, potentially limiting margin expansion and revenue per employee.
medium · analyst_questionVendor consolidation may intensify competition
As clients consolidate vendors, competition with larger peers could pressure margins and win rates.
medium · analyst_questionNotable Quotes
We had a strong start to a financial year. Our revenues grew 2.6% sequentially and 3.8% year-on-year in constant currency terms.
While Q1 was strong, if you look at the environment underlying, it hasn't really changed. Q2, we are not really seeing the signs of significant environment changes.
We are the only large India-based technology services company to be positioned as a leader in Gartner's 1st Generative AI Consulting and Implementation Services quadrant.