Winning Bizness Desk

Mumbai. Infosys on January 14 announced its results for the third quarter of financial year 2025–26, reporting a fall in profit even as revenue continued to rise. The company’s consolidated net profit declined 2.2 percent to Rs 6,654 crore, compared with Rs 6,806 crore in the same quarter last year. Revenue from operations grew by about 9 percent to Rs 45,479 crore, up from Rs 41,764 crore a year ago. On the back of steady demand, Infosys also raised its full year revenue growth guidance from 2 to 3 percent to a higher range of 3 to 3.5 percent.

New labour rules hit profitability

The main reason for the drop in profit was the impact of India’s new labour codes. Infosys said it had to set aside an additional Rs 1,289 crore towards gratuity and leave encashment liabilities due to the new rules. This was a one time cost that affected earnings in the quarter. The new labour codes, which came into effect from November 21, require companies to change salary structures so that basic pay is at least 50 percent of the total cost to company, or CTC.

Employee attrition shows steady improvement

One positive trend for the company was a decline in employee attrition, which is a key concern for the IT sector. Infosys said its attrition rate fell to 12.3 percent, compared to 13.7 percent last year. On a quarter on quarter basis, it dropped by 2 percent. This means fewer employees are leaving the company, showing better stability in the workforce and improved retention.

CEO highlights growing strength in artificial intelligence

Commenting on the results, Infosys CEO and managing director Salil Parekh said the company delivered a strong performance in the third quarter. He said Infosys is gaining market share because of its enterprise AI platform Infosys Topaz.

He added that...

• Clients now see Infosys as a trusted AI partner
• The company’s AI expertise is helping customers improve business value
• New innovation is driving growth in key accounts

Share price reacts ahead of results

Before the results were announced, Infosys shares closed 0.62 percent higher at Rs 1,608.90. Investors were expecting the company to raise its revenue guidance, which it eventually did. The positive outlook on future earnings helped support the stock.

What revenue guidance means for investors

Revenue guidance is the company’s estimate of how much its income may grow over the full financial year. By raising its guidance to up to 3.5 percent, Infosys is signalling that it expects stronger deal wins and business momentum in the coming months. This suggests growing confidence in demand for its services, especially in areas such as artificial intelligence and digital transformation.