Infosys reported a sharp sequential jump in March-quarter profit, though the growth was aided by a tax reversal, even as dollar revenue declined and demand remained uneven across segments.

The IT major posted a consolidated net profit of ₹8,501 crore, up 27.8% quarter-on-quarter from ₹6,654 crore. Revenue rose 2% sequentially to ₹46,402 crore, while dollar revenue fell 1.2% QoQ to $5.04 billion. In constant currency terms, revenue declined 1.3% sequentially, stressing continued softness in the demand environment.

Profit boosted by tax reversal

The surge in profit was partly driven by a one-time tax adjustment. Infosys reported income tax expense of ₹2,288 crore, lower than ₹2,563 crore in the previous quarter, aided by a ₹774 crore reversal of tax provisions following favourable income tax orders.

This helped net profit grow substantially faster than operating performance.

Margins improve, but base effect skews comparison

Operating profit rose to ₹9,743 crore, with operating margin at 21%, compared with 20.8% in the December quarter.

However, the comparison is influenced by a one-time labour code-related charge in the previous quarter, which had depressed margins. Adjusted for this, margin performance was broadly stable sequentially.

Revenue mixed despite strong deal wins

While topline growth remained modest, Infosys continued to see traction in large deal wins.

For the full year, the company reported large deal TCV of $14.9 billion, reflecting strong demand for large transformation programmes.

Commenting on the performance, CEO and MD Salil Parekh said, “We delivered a resilient performance in FY26 with growth of 3.1% with strong large deal wins of $14.9 billion, reflecting the robustness of our enterprise AI value proposition and market share gains in large transformation opportunities.”

He added, “The simplicity and strength of our AI services strategy across six areas is gaining traction in the market… Our AI First value framework and differentiated Topaz Fabric position us uniquely to deepen client trust and gain greater share of the market.”

FY27 outlook cautious

Infosys guided for revenue growth of 1.5%–3.5% in constant currency for FY27, indicating a cautious outlook amid global macro uncertainty. The company expects operating margins in the 20%–22% range.

The company maintained strong cash generation during the year.

CFO Jayesh Sanghrajka said, “FY26 was a year of disciplined execution and financial resilience reflecting in 21% adjusted operating margin and healthy free cash flow of $3.7 billion.”

He added, “In line with our capital allocation policy, the Board has proposed a final dividend of ₹25 per share… amounting to over ₹37,500 crore returned to shareholders for FY26.”

The board recommended a final dividend of ₹25 per equity share (face value ₹5), with a record date of June 10, 2026, and payment scheduled for June 25, 2026, taking the total dividend for FY26 to ₹48 per share.

The shares of Infosys ended 2.9% lower at ₹1,231.80 apiece on the NSE on Thursday. The stock has declined over 16% in the past year, underperforming the benchmark Nifty 50 index, which has fallen nearly 1% during the same period.