Infosys announced strong Q2 FY26 results with revenue up 2.2% sequentially and 2.9% year-on-year in constant currency. The company increased its revenue growth guidance to 2-3% for the full year. Infosys is focusing on enterprise AI solutions, evidenced by more than 2,500 Generative AI projects. Operating margins expanded to 21%. Large deal TCV was $3.1 billion, with 67% net new.
Financial Performance Highlights
Infosys reported a strong Q2 FY26 performance, demonstrating growth and resilience in a dynamic environment. Key highlights include:
- Revenue growth of 2.2% sequentially and 2.9% year-on-year in constant currency.
- Operating margin expansion to 21%, a sequential increase of 20 basis points.
- Large deal TCV of $3.1 billion, with 67% representing net new deals.
- Free cash flow generation of $1.1 billion.
- Q2 EPS in rupee terms grew by 13% year-on-year to Rs. 17.6.
Revised Guidance for FY26
Based on the strong Q2 performance, Infosys has revised its revenue growth guidance for the full financial year FY26 to 2% to 3% in constant currency terms. The operating margin guidance remains unchanged at 20% to 22%.
Strategic Focus on AI
Infosys is intensifying its focus on enterprise AI solutions, positioning itself as a leader in this domain. Key points include:
- More than 2,500 Generative AI and AI projects are currently being delivered for clients.
- Development of agentic AI projects.
- About 90% of Infosys employees are AI aware and equipped to leverage AI tools.
- Over 22,000 developers onboarded with GitHub Copilot.
Key Initiatives and Partnerships
Infosys is undertaking various initiatives and strategic partnerships to drive innovation and deliver value to clients:
- Deployment of AI agents across internal operations, unlocking $50 million in incremental cash flow.
- Building strategic alliances with technology leaders such as Nvidia, Microsoft, AWS, Intel, Meta, and Google Cloud.
- Collaborations with academic institutions to fuel AI research and practical enterprise applications.
Vertical Performance
Different sectors showed varied momentum:
- Financial Services: Clients are planning modernization and AI-driven initiatives.
- Manufacturing: Facing trade and macro uncertainties, but leveraging AI and automation.
- EURS: Strong focus on cost reduction and operational efficiency.
- Retail: Cautious due to tariff-related uncertainties, with focus on AI, cloud, and cost takeout.
- Hi-Tech: Focus on cost reduction, but opportunities emerging in areas like semiconductors.
Source: BSE
