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Research Alert: Infosys: Fy 26 Results In Line, Stable Core Segments Offset Cyclical Weakness

-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Infosys' FY 26 results were in line with expectations. Net profit rose 4.9% Y/Y to USD3.3B and revenue increased 3.1% Y/Y to USD20B. Operating margin declined to 20.3% (-80 bps), reflecting weaker cost absorption despite large deal ramp-ups. Large deal momentum with TCV of USD15B and increasing AI-led services traction support the growth outlook, but demand conditions remain cautious with slower discretionary spending. Management guided FY 27 revenue growth of 1.5%-3.5% and operating margin of 20%-22%, implying a broadly unchanged profile. Core segments like Financial Services (+5.0%) and Manufacturing (+5.9%) remained stable, while cyclical segments showed mixed performance with Hi-Tech (-1.5%) and Retail (-2.9%) constrained by discretionary weakness. We anticipate growth to be driven by consistent large deal wins (with 55% representing new contracts) and growing momentum in AI-led services. However, cautious client spending and extended conversion cycles continue to limit near-term visibility.

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