Infosys Q1 preview: Profit to dip QoQ even as revenue rises; view estimates

Infosys will report its earnings for the first quarter ended June on Wednesday, with its profit likely to fall 4 per cent sequentially

Infosys Ltd. is set to report its June quarter earnings, with analysts expecting a sequential decline in net profit even as revenue rises, driven by strength in the financial services vertical.

 

The information technology bellwether will report its earnings for the first quarter ended June on July 23, Wednesday.

 

Infosys’ revenue is expected to come in at ₹41,753.08 crore, marking a 2.02 per cent quarter-on-quarter (Q-o-Q) increase, according to consensus estimates tracked by Business Standard. On a year-on-year (Y-o-Y) basis, the company’s top line is projected to grow by 6.20 per cent.

 

The revenue growth is likely to be led by the steady ramp-up of deals won in previous quarters and contribution from acquisitions, analysts noted. 

 

 

However, the IT major is expected to post a 4.12 per cent decline in net profit for the June quarter sequentially to ₹6,743.05 crore. On a Y-o-Y basis, the net profit is expected to grow at an average of 5.69 per cent. 

 

In the March quarter, Infosys' revenue fell 2 per cent to ₹40,925 crore sequentially, while its profit rose 3 per cent to ₹7,033 crore. Margins dipped sequentially to 21 per cent, from 21.3 per cent December three-month period.  

 

Any change in FY26 guidance, any improvement in the pace of deal closures and pricing pressures will be the key factors to watch out for, analysts added.  

Here's how analysts of various brokerages expect Infosys to fare in Q1:

Motilal Oswal:  Infosys is expected to report 1.5 per cent Q-o-Q growth in constant currency (CC) terms, supported by seasonally better calendar days, recent deal ramp-ups, and a 20 basis points (bps) inorganic contribution from its recent acquisition.

 

The first half of the financial year is likely to shoulder the growth momentum, in line with previous years. The banking, financial services, and insurance (BFSI) segment in the US is expected to remain resilient, while retail continues to face softness. Operating margin is expected to decline by 10 bps due to wage hikes for senior pyramid levels and the ramp-up of large deals. 

 

Motilal Oswal expects Infosys to revise the lower end of its revenue guidance upwards by 100 bps to reflect the inorganic contribution. The current guidance stands at 0-3 per cent CC for FY26, with the inorganic impact estimated at 80 bps.

 

Kotak Securities:  The brokerage Infosys is to report 1.6 per cent Q-o-Q revenue growth, driven by higher billing days and continued strength in the financial services vertical. Growth includes an estimated 30 bps contribution from recent acquisitions, The Missing Link and MRE Consulting.

 

The brokerage expects Ebit margin to remain stable both sequentially and on a Y-o-Y basis. In the June 2025 quarter, tailwinds such as currency gains and some operating leverage from revenue growth are expected to offset the elevated margin base of the prior quarter.

 

Kotak expects large-deal total contract value (TCV) to come in at around $3 billion, a decline on a Y-o-Y basis. The brokerage anticipates Infosys will revise its CC revenue growth guidance for FY26 to 1-3 per cent from the earlier 0-3 per cent range.  

 

ICICI Securities:  It expects Infosys to post 2.8 per cent Q-o-Q growth in CC terms, driven by a steady ramp-up of previously won deals and a two-month contribution from the recent acquisitions.

 

Demand remains resilient in the BFSI, industrial, and manufacturing (excluding auto) segments. However, verticals such as retail, communication, automotive, and hi-tech are expected to remain soft.

 

ICICI Securities expects Infosys’ Ebit margin to contract by approximately 25 bps. However, the impact is likely to be partially offset by cost savings from Project Maximus and the absence of one-time expenses and visa costs that were incurred in the March 2025 quarter.