Infosys Q4 Growth At 4.1%, Margins Steady At 20.9%; FY26 EPS Rises 11%, Deal Wins Hit $15 Billion

Mumbai: Infosys reported a 4.1 percent year-on-year growth in Q4 FY26 revenue in constant currency terms, while operating margin stood at 20.9 percent. For the full year, revenue growth came in at 3.1 percent, with margins steady at 21 percent. Earnings per share rose 11 percent for FY26 and surged 23.8 percent in Q4, reflecting resilient profitability despite a cautious demand environment.

Full-year performance remains stable amid weak volumes

Infosys’ FY26 performance was supported by pricing-led growth, even as volumes remained largely flat. The company maintained an operating margin of 21 percent, absorbing investments in AI, talent, and sales. Growth was led by Financial Services, Manufacturing, and Europe, with these segments outperforming company averages.

Large deal wins stood at 15 billion dollars for the year, marking a 28 percent increase, indicating sustained client demand for transformation-led engagements.

Sequential moderation due to seasonality and slower decisions

On a sequential basis, Q4 revenue declined 1.3 percent in constant currency, attributed to seasonal softness and slower client decision-making in March. Operating margin declined marginally by 0.3 percentage points QoQ to 20.9 percent, impacted by acquisition-related costs and compensation adjustments. These headwinds were partly offset by currency benefits and internal efficiency initiatives under Project Maximus.

AI-led transformation driving deal pipeline

The company highlighted strong traction in AI-driven services, with increasing client focus on automation, productivity, and legacy modernization. Large deal total contract value (TCV) for Q4 stood at 3.2 billion dollars, supported by diversified sector demand. Infosys noted that AI-led productivity is simultaneously creating efficiency gains for clients while opening new revenue streams in areas such as data, process transformation, and modernization.

Cash flow, hiring, and capital allocation

Free cash flow for FY26 stood at 3.5 billion dollars, with conversion exceeding 100 percent of net profit. The company ended the year with over 4.5 billion dollars in cash and investments after returning 4 billion dollars to shareholders. The board proposed a final dividend of Rupees 25 per share, taking total FY26 payout to Rupees 48 per share, up 11.6 percent year-on-year. Headcount stood at over 328,000 employees, with a net addition of 5,000 during the year despite a sequential decline in Q4.

Disclaimer: This article is based on earnings transcript disclosures and not a complete UFR filing; it does not constitute investment advice.