Infosys Reports Strongest Growth in Three Years, Amid Uncertainty for Big Five in 2023

Infosys Beats Analysts' Expectations, Flags AI Threat

Infosys Ltd reported a revenue growth of 4.57% to $20.16 billion in the last fiscal year, marking its fastest pace in three years. The Bengaluru-headquartered company beat analysts' expectations of $19.15 billion in revenue, as reported by Bloomberg.

The company's revenue growth was driven primarily by manufacturing, which accounts for a fifth of its business. A third of its incremental revenue came from this sector. However, Infosys also flagged the potential impact of artificial intelligence (AI) technologies on its revenue in the current fiscal year. The company's chief executive, Salil Parekh, noted that AI may squeeze revenue, much like its peers have experienced challenges due to client-specific issues and the rise of automation tools.

Infosys' net profit jumped 4.9% to $3.31 billion in the March quarter. The company's shares traded 6.7% lower on the New York Stock Exchange, indicating investor disappointment.

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The company's peers, including Tata Consultancy Services (TCS), Wipro, HCL Technologies, and Tech Mahindra, have also voiced concerns about the demand environment. TCS and Wipro ended FY26 with lower revenues, marking the first time two of the country's four largest tech outsourcers ended with a full-year revenue decline. TCS and Wipro ended with $30.08 billion and $10.48 billion in revenue, down 0.54% and 0.32%, respectively.

However, HCL Technologies clocked the industry-best revenue growth of 5.95% to $14.66 billion. Tech Mahindra reported growth after two years of a revenue decline, but remains cautious about demand.

Infosys now expects 1.5-3.5% revenue growth in constant currency terms in FY27, higher than 0-3% it estimated in April 2025. The company's guidance does not factor in about 200 basis points of growth from two acquisitions Infosys closed in the previous fiscal.

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The company's profitability fell 80 basis points to 20.3%, while TCS, Wipro, and Tech Mahindra's margins rose between 10-290 basis points. In contrast, HCLTech's margins fell 110 basis points to 17.2%. Infosys added 5,016 people in FY26 to end with 328,594 employees, while TCS cut more than 23,000 roles and Tech Mahindra cut headcount by more than 1,100.