Infosys Q1 profit slips 9% sequentially; names Ashiss Kumar Dash CEO-designate

Infosys Ltd on Thursday reported an 8.6% sequential decline in consolidated net profit for the June quarter, even as revenue, operating margins and large deal wins improved amid growing enterprise spending on artificial intelligence. The IT major also announced a planned leadership transition, appointing company veteran Ashiss Kumar Dash as CEO-designate. He will succeed Salil Parekh as managing director and chief executive officer from April 1, 2027, following the completion of Parekh's second term.

The Bengaluru-based company posted a consolidated net profit of ₹7,769 crore for the quarter ended June 30, down 8.6% from ₹8,501 crore in the preceding quarter. Revenue from operations rose 3.9% sequentially to ₹48,211 crore, while operating profit increased 4.3% to ₹10,163 crore. Operating margin improved to 21.1% from 21% in the March quarter.

In dollar terms, revenue stood at $5.08 billion, while constant currency revenue grew 1% sequentially, reversing the 1.3% decline recorded in the previous quarter. Infosys revised its FY27 constant currency revenue growth guidance to 1.5%-3.0% from 1%-3% earlier, while retaining its operating margin guidance at 20%-22%.

AI momentum, deal wins remain strong

Large deal momentum remained healthy during the quarter, with total contract value (TCV) of large deals at $3.6 billion, of which 61% was net new. AI continued to emerge as a key growth driver, contributing 8.2% of total revenue, while free cash flow stood at $955 million (₹9,051 crore), representing more than 116% of net profit.

"AI momentum is now rapidly converting into revenue, which demonstrates how Infosys' differentiated enterprise AI value proposition is translating into consistent market share gains. Strong large deal wins, powered by Infosys Topaz, reinforce client confidence in our ability to be the strategic partner of choice for AI transformation driving tangible business value," said Salil Parekh, CEO and managing director.

"With strategic partnerships established with all leading AI companies, we are bringing the power of the innovation ecosystem to help clients accelerate operational productivity and unlock growth opportunities," he added.

Chief financial officer Jayesh Sanghrajka said, "Our resilient margins of 21.1% and consistent strong cash generation reflect the strength of our business model, disciplined execution and continued focus on operational excellence in a challenging business environment."

"We are accelerating investments in AI, talent and platforms to drive future growth and remain committed to improving productivity, expanding operating leverage and maintaining the financial flexibility needed to capitalise on emerging opportunities while delivering sustainable shareholder value," he added.

Infosys names Dash as CEO-designate

Separately, Infosys said Ashiss Kumar Dash, who has spent more than three decades with the company, will take over as Managing Director and CEO from April 1, 2027. He currently heads a global business portfolio spanning more than a dozen industry verticals and will work closely with Parekh over the coming months to ensure a seamless transition.

Infosys chairman Nandan Nilekani said, "The Board was clear that our next CEO needed to combine the ability to drive bold transformation with the judgment to preserve the values and customer trust that have always distinguished Infosys. It gives me great pleasure that we have an internal leader as our next CEO." He also credited Parekh with strengthening Infosys' market position and laying the foundation for its AI strategy.

Parekh said it had been "an honour" to lead Infosys over the past nine years, during which the company grew from $10 billion in revenue to over $20 billion. "Having worked closely with Dash over many years, I have seen first-hand his integrity, customer focus, and ability to lead through change," he said.

Accepting the new role, Dash said, "Technology is entering a new era, with AI fundamentally reshaping how businesses operate and create value." He added that Infosys enters this phase with a clear AI strategy, deep client relationships and exceptional talent, and pledged to accelerate innovation while helping clients navigate an increasingly AI-driven world.

Shares of Infosys Ltd ended 0.80% higher at ₹1,052.90 apiece on the NSE on Thursday. The stock has lost over 33% in the past year, sharply underperforming the benchmark Nifty 50 index, which has declined nearly 6% over the same period.