Infosys posts Q2 net profit of Rs 7,823 crore but lowers annual revenue growth forecast

IT major Infosys recorded a consolidated net profit of Rs 7,823 crore for the September quarter, marking a 6.2 percent increase compared to Rs 7,364 crore during the same period in the previous year. Operating revenue grew by 10.2 percent to reach Rs 49,244 crore, up from Rs 44,490 crore.

Growth And AI

Chief Executive Officer and Managing Director Salil Parekh stated that large deal values reached 5.2 billion dollars, roughly Rs 49,000 crore, during the July-September period, including a mega contract exceeding 2 billion dollars spanning seven years. Artificial intelligence revenue rose to 10.5 percent of total income, driven by a 29 percent quarter-on-quarter growth as companies adopt AI and cybersecurity solutions. The operating margin remained steady at 21 percent. However, citing sluggish demand in the American market, the company revised its constant currency annual revenue growth guidance downward from 1.5 to 3 percent down to 1 to 2 percent.

Hiring And Dividends

Parekh noted that the total employee count increased by a net 4,000, with 8,000 campus hires onboarded during the quarter, while maintaining the target of 20,000 campus recruits for the 2025-26 financial year. Chief Financial Officer Jayesh Sanghrajka highlighted that wage hikes and pricing pressures would impact margins in the second half of the year. Meanwhile, the board announced an interim dividend of Rs 26 per share, representing a 13 percent increase over the previous year. Brokerage firms UBS and HSBC offered differing stances, with UBS keeping a buy rating with a target price of Rs 1,415, while HSBC maintained a hold rating with a target price of Rs 1,110.

Context

Large Indian information technology firms frequently adjust their annual revenue forecasts based on spending trends in Western markets, particularly the United States. Quarterly performance updates and interim dividends are standard financial mechanisms used by publicly listed corporations to reward shareholders and signal corporate health to financial markets.