Shares of Infosys Ltd surged nearly 5% in early trade on Thursday after the company reported its Q3 FY26 results and surprised the Street by raising its revenue growth guidance.
According to exchange data, Infosys was trading around Rs 1,667 at 9:25 am, up about Rs 69 from its previous close of Rs 1,599. The stock opened on a strong note and remained in positive territory through early trade as buying interest stayed firm.
Infosys reported constant currency revenue growth of 0.6% quarter-on-quarter, beating market expectations of flat growth. The stronger-than-expected performance played a key role in lifting investor confidence.
More importantly, the company raised its FY26 constant currency revenue growth guidance to 3%–3.5%, from the earlier range of 2%–3%. Management cited steady discretionary technology spending and renewed momentum in its core financial services business.
The guidance upgrade came as a positive surprise at a time when many global IT companies continue to remain cautious on demand conditions.
Infosys reported deal wins worth $4.8 billion in the third quarter, a sharp increase from $3.1 billion in the previous quarter. About 57% of these deals were classified as net new, indicating fresh business additions rather than renewals.
The deal pipeline was supported by a large contract win from NHS UK. Robust deal activity is often viewed as an early indicator of demand recovery, which the market welcomed.
The company also reported its highest headcount in 11 quarters, adding 11,246 employees over the past two quarters. The hiring momentum signalled management’s confidence in future growth and execution.
In the IT sector, sustained hiring is generally seen as a positive indicator after several quarters of subdued workforce expansion.
Adjusted EBIT margin for the quarter stood at 21.2%, broadly in line with expectations, while reported margins came in at 18.4%.
Infosys said reported margins were impacted by a one-time Labour Code-related cost of Rs 1,289 crore during the quarter.
Net profit declined 9.7% year-on-year to Rs 6,654 crore, compared with Rs 7,365 crore in the same quarter last year. However, investors appeared to look past the profit decline, focusing instead on revenue growth, deal momentum and the upgraded outlook.
Infosys’ US-listed shares jumped 10.5% overnight following the earnings announcement, providing an additional boost to sentiment in the domestic market.
Brokerages largely maintained a positive stance on the stock. Nomura reiterated its Buy rating with an unchanged target price of Rs 1,810, citing revenue outperformance and early signs of discretionary demand recovery. The brokerage expects Infosys to deliver 4.7% year-on-year dollar revenue growth in FY26 and noted that the stock is trading at about 21.2 times estimated FY27 earnings.
Emkay Global described the operating performance as mixed, with revenue beating estimates while margins came in slightly below expectations. However, it highlighted that the upper end of the revised guidance points to an improving macro environment. Emkay retained its Buy rating with a target price of Rs 1,750.
