Infosys Adjusts Revenue Forecast Amidst Evolving Market Conditions
In a recent update, Bengaluru’s prominent IT services firm, Infosys Ltd, has revised its revenue growth projections for the fiscal year 2026. The company now anticipates a more conservative increase of 0-3% in constant currency, a notable shift from the earlier estimate of 4.5-5% announced during the December quarter. Alongside this adjustment, Infosys has also updated its operating margin expectations for the current fiscal year, setting it between 20-22%.
Understanding the Revenue Adjustments
During a post-earnings press conference, Infosys management expressed their cautious outlook, stating, “Our guidance reflects uncertainty at the lower end. We are committed to sharing what is clear to us with our clients.” This transparency indicates a strategic approach amid fluctuating market dynamics.
Q4FY25 Financial Highlights
On the same day, Infosys disclosed its earnings for the fourth quarter of fiscal year 2025, reporting total revenues of $19.3 billion for the year, which marks a 4.2% increase in constant currency. The company’s operating margin improved to 21.1%, reflecting a 0.5% year-on-year growth. Notably, Infosys achieved its highest-ever free cash flow of $4.1 billion, a remarkable 41.8% increase compared to the previous year. Additionally, the company secured a total contract value (TCV) of $11.6 billion in large deals, with 56% comprising net new contracts.
Quarterly Performance Details
For Q4FY25, Infosys generated revenues of $4.7 billion, which is a 4.8% increase year-on-year in constant currency and 3.6% in reported terms. The operating margin for this quarter stood at 21.0%, marking a 0.9% rise from the previous year.
In terms of profitability, Infosys reported a net profit of ₹7,033 crore, reflecting an 11.75% decline from ₹7,969 crore during the same quarter last year. Revenue from operations reached ₹40,925 crore, an increase of 7.92% year-on-year.
Leadership Insights
Salil Parekh, CEO and Managing Director of Infosys, highlighted the company’s resilience, stating, “We have developed a robust organization centered around client needs and market responsiveness, attributed to our clients’ trust and our employees’ dedication. Our annual performance showcases significant revenue growth, operating margin expansion, and the highest free cash flow generation in our history.”
Dividend Announcement
In a positive move for shareholders, the Infosys board has proposed a final dividend of ₹22, which, when combined with the interim dividend, represents a 13.2% increase compared to the previous year.
In summary, while Infosys is navigating a more cautious revenue landscape, its strong financial performance and commitment to client satisfaction place it in a favorable position moving forward. For further insights into Infosys’s strategic direction and detailed financial reports, visit the official Infosys website.
