Infosys Ltd has reported a 2.2 percent drop in its consolidated net profit for the third quarter ending December 2025. The company's profit fell to Rs 6,654 crore from Rs 6,806 crore in the same period last year.
Labour Codes Drive Exceptional Expenses
This profit decline stems directly from exceptional expenses totaling Rs 1,289 crore. These expenses relate to the impact of new labour codes implemented during the quarter. The company clarified that these adjustments cover increased gratuity liability from past service costs and higher leave liability. Together, these items amount to $143 million or Rs 1,289 crore, recognized in the Consolidated Statement of Comprehensive Income.
Revenue Shows Strong Growth Despite Profit Pressure
While profits dipped, Infosys demonstrated robust revenue performance. Quarterly revenue surged 8.9 percent to Rs 45,479 crore compared to Rs 41,764 crore a year earlier. This growth highlights the company's ability to maintain business momentum even while absorbing significant one-time costs.
Leadership Points to AI Capabilities
Salil Parekh, Chief Executive Officer and Managing Director of Infosys, emphasized the company's strong Q3 performance. He stated that Infosys continues to gain market share through its enterprise AI offerings, particularly through the Infosys Topaz platform. Parekh noted that clients increasingly view Infosys as their preferred AI partner due to its demonstrated expertise, innovation capabilities, and strong delivery credentials.
"This has helped them unlock business potential and enhanced value realisation," Parekh said. He also stressed the company's commitment to reskilling and transforming its workforce to succeed in an AI-augmented world.
Future Outlook and Market Response
Looking ahead to fiscal year 2026, Infosys has provided revenue guidance of 3.0 to 3.5 percent growth in constant currency terms. The company expects an operating margin between 20 and 22 percent for the same period.
On the stock market, Infosys shares closed essentially unchanged at Rs 1,599.05 on the Bombay Stock Exchange this Wednesday. This flat closing suggests investors may have already priced in the quarterly results or are focusing more on the company's future guidance and revenue growth story.
The quarterly results present a mixed picture for Infosys. While labour code adjustments temporarily pressured profits, the company continues to show strong revenue growth and maintains confidence in its AI-driven strategy for future expansion.
