Infosys Q3 Results Show Mixed Performance Amid Market Focus
Infosys share price will attract significant attention when trading resumes on Friday. The Indian stock market remains closed for a holiday on Thursday. Investors eagerly await the market's reaction to the company's latest quarterly results.
Strong ADR Performance Signals Investor Confidence
Infosys American Depositary Receipts surged impressively on the New York Stock Exchange this Wednesday. The ADR jumped over 10% following the company's revised revenue outlook announcement. It closed at $19.35, marking a solid 10.45% increase for the day.
This positive movement came after Infosys raised its constant-currency revenue growth guidance for FY26. The company now projects growth between 3.0% and 3.5%, up from the previous range of 2% to 3%.
Quarterly Financial Performance Details
India's second-largest IT services provider reported a net profit of ₹6,654 crore for the third quarter of FY26. This represents a 9.6% decline from the ₹7,364 crore recorded in the previous quarter. The company's revenue showed modest growth during the same period.
Revenue increased by 2.2% quarter-on-quarter to reach ₹45,479 crore. In dollar terms, revenue grew 0.5% to $5,099 million. Constant currency revenue growth stood at 0.6% sequentially and 1.7% year-on-year.
At the operational level, EBIT rose 1.3% to ₹9,479 crore. However, the EBIT margin experienced a slight contraction of 20 basis points to 20.8%. Infosys maintained its operating margin outlook of 20% to 22% for FY26.
Analyst Perspectives on Q3 Performance
Dipeshkumar Mehta, Senior Research Analyst at Emkay Global Financial Services Ltd, described the quarter as mixed. He noted that revenue estimates were beaten while margins missed expectations.
"Revenue grew 0.6% in constant currency terms quarter-on-quarter," Mehta observed. "Adjusted EBIT margin declined by 20 basis points to 20.8%, missing our estimate."
He highlighted strong large-deal performance with total contract value reaching $4.8 billion. About 57% of these deals represented net new business. Management expects acceleration in revenue growth for BFSI and EURS verticals during FY27.
Mehta pointed out that the raised guidance excludes potential revenue from the Telstra joint venture. The guidance reflects elevated uncertainty at the lower end but suggests a better macro scenario at the upper end.
Brokerage Recommendations and Target Prices
Centrum Broking maintained a 'Buy' rating on Infosys shares. The brokerage firm raised its target price to ₹2,076 from the previous ₹1,951. They expect revenue, EBITDA, and PAT to achieve compound annual growth rates between 9.2% and 10.3% from FY25 to FY28.
"The outlook remains positive with continued traction in select verticals such as BFSI," Centrum Broking stated. "The company is seeing growing adoption of AI services across industry verticals driving deal pipeline."
Emkay Global also retained its 'Buy' recommendation. They set a share price target of ₹1,750 based on 22 times December 2027 estimated earnings per share. The firm adjusted earnings estimates between -2.1% and 0.5% following the Q3 results.
Market Context and Closing Price
Infosys shares closed marginally higher at ₹1,599.05 on Wednesday. This represented a slight 0.07% increase ahead of the quarterly results announcement. The company continues to navigate a cautious demand environment while demonstrating strong deal activity.
Analysts note that client interest in AI-led transformation remains robust. While macro and regulatory uncertainties persist, Infosys appears well-positioned for sustained near-term growth. The company maintains margin discipline and stable hiring trends according to brokerage assessments.
Disclaimer: The views and recommendations presented here belong to individual analysts or brokerage firms. They do not represent official positions. Investors should consult certified experts before making investment decisions.
