Infosys Outshines TCS with Strong December Quarter Performance
Infosys delivered a stronger performance than its larger rival TCS in the December quarter. The company's shares jumped as much as 8% in early trading on the New York Stock Exchange this Wednesday. This surge followed Infosys reporting higher-than-expected sales. The boost came from robust large deal wins. Infosys also upgraded its revenue growth guidance for the financial year 2026.
Revenue Growth Figures in Detail
Infosys posted a sequential revenue growth of 0.6% in constant currency terms. Year-on-year, the growth stood at 1.7%. In dollar terms, revenues increased by 0.5% sequentially. They rose 3.2% year-on-year to reach $5 billion.
TCS reported a 0.8% rise in revenue in constant currency terms. However, it posted a 2.6% year-on-year decline. In contrast, HCLTech recorded stronger growth. HCLTech saw an increase of 4.2% quarter-on-quarter and 4.8% year-on-year.
Revised Guidance and Market Confidence
Infosys revised its revenue growth guidance for FY26 to 3%–3.5%. This indicates improving visibility on demand. Earlier, the company raised the lower end of its revenue growth forecast for the current financial year. It moved from an earlier range of 1%–3% to 2%–3%. This change cites better execution and deal momentum. The company maintained its operating margin guidance at 20%–22%.
Infosys CEO Salil Parekh commented on the results. He said, "We saw several large deals in the previous few quarters and strong execution this quarter. We are seeing improvements in financial services and energy, utilities and resources. The way deals came through, and the manner in which we became the AI partner of choice for our largest clients, gives us confidence as we look into the next financial year. This helped us increase the guidance for the current financial year ending March."
Deal Wins and Financial Metrics
Large deal wins during the quarter stood at $4.8 billion. A significant 57% came from net-new deals. This reflects improving client decision-making and deal conversions. However, Infosys' operating margin dropped 2.6% sequentially. It also fell 2.9% year-on-year to 18.4%.
The company reported a one-time exceptional charge of Rs 1,289 crore for the December quarter. This charge resulted from the implementation of the recently revised labour code.
