Infosys Delivers Strong Q2 Show: Profit Up 13%, AI Deals Drive Growth Amid IT Challenges
Infosys Delivers Strong Q2 Show: Profit Up 13%, AI Deals Drive Growth Amid IT Challenges
Infosys, India’s second-largest IT firm, has once again proven its strength even in a weak global tech market. On October 16, 2025, the company announced its Q2 FY26 results, showing solid growth in both profits and new deal wins.
Revenue improved, profit jumped over 13%, and the firm declared a higher dividend. Despite a slight dip in share price after the results, Infosys continues to show long-term stability and focus on AI-led transformation.
Key Takeaways
- Net profit surged 13.2% year-over-year to ₹7,364 crore.
- Revenue rose 8.6% YoY to ₹44,490 crore, beating estimates.
- Free cash flow stood at ₹9,677 crore, 131% of profits.
- AI-powered deals formed 70% of new contracts.
- ₹23 per share interim dividend announced, up 9.5% from last year.
Infosys’ Numbers Beat Market Estimates
Infosys exceeded market expectations in a challenging environment. The company’s cost optimization efforts and favorable currency movement helped drive the results.
| Metric | Q2 FY26 Value | YoY Change | QoQ Change | Vs. Estimates |
|---|---|---|---|---|
| Revenue (₹ Cr) | 44,490 | +8.6% | +5.3% | Beat (44,142) |
| Net Profit (₹ Cr) | 7,364 | +13.2% | +6.4% | Beat (7,221) |
| EBIT Margin (%) | 21.0 | -0.1 pts | +0.2 pts | Miss (21.3) |
| EPS (₹) | 17.50 | +13.1% | +6.0% | In-line |
In constant currency terms, revenue grew 2.9% YoY and 2.2% sequentially, outperforming forecasts. The Americas contributed 60% of total sales, with financial services up 3.5% YoY.
Strong execution under “Project Maximus” and a weaker rupee added to the gains.
For investors, this shows consistent performance even when global clients are cautious about tech spending.
AI-Led Growth and New Client Wins
Infosys is positioning itself at the center of the AI revolution. CEO Salil Parekh highlighted the company’s shift to an “AI-first culture,” with over 200,000 employees reskilled to work with AI-driven tools.
The company signed $3.1 billion worth of deals in Q2, with 67% being new client contracts. A major one includes a multi-year agreement with the UK’s NHS to manage payroll for 1.9 million employees.
Infosys’ Topaz AI platform played a key role, featuring in 70% of all deals this quarter.
The firm maintained its FY26 revenue guidance at 2–3% constant currency growth, with margins expected between 20–22%.
Headcount increased by 8,203 to reach 331,991, though attrition edged up to 14.3%. Infosys plans to hire 20,000 freshers this year, keeping a ₹32,000 crore net cash position.
Dividend Boost and Buyback Plans
Infosys declared an interim dividend of ₹23 per share, higher than last year’s ₹21, and announced a ₹18,000 crore buyback at ₹1,800 per share (a 19% premium).
The record date is October 27, and payout is scheduled by November 7.
This marks Infosys’ fifth buyback in eight years, reaffirming its commitment to shareholder returns.
Market Reaction and Analyst View
Infosys shares fell 3–4% in post-market trade due to profit booking, though the stock remains up 32% over five years. Analysts remain optimistic, with 36 out of 51 recommending a ‘Buy’.
Social media reactions were mostly positive, focusing on the profit growth, steady margins, and AI leadership. While some compared growth unfavorably to faster midcaps like Persistent, most investors welcomed Infosys’ consistency.
Why This Matters
Infosys’ results underline how large Indian IT firms are adapting to global uncertainty with technology-led efficiency. While the overall IT sector is still facing a slow recovery, Infosys’ focus on AI and cost control is helping it stay ahead. With peers like TCS and LTIMindtree set to report soon, similar results could confirm a broader sector rebound.
Bottom line: Infosys may not be the fastest mover, but it remains one of the most dependable players in the IT space and reliability counts the most in uncertain times.
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