IT services major Infosys—which reported its Q3FY26 results on Wednesday—saw a ₹1,289 crore hit to its profits because of changes in the remuneration computation under the new labour code; this was in line with its peers. However, barring the one-time cost, the company reported a quarter-on-quarter revenue growth of 0.6% and raised its full-year guidance from the earlier 2–3% to 3–3.5%, on the back of $4.8 billion in large deal bookings, with over half of it being new. Here are the top takeaways from the company’s management commentary.

Q3FY26 Performance

Infosys, in constant currency terms, posted a 0.6% QoQ revenue growth (1.7% year-on-year) in the third quarter of the current fiscal. The company’s profitability took a hit on the back of labour code-related costs; reported operating margins stood at 18.4%, while adjusted margins came in at 21.2%. The company signed 26 large deals, including 10 in financial services, worth $4.8 billion in the quarter, with 57% of those being net new. Infosys increased its headcount by 5,043 in the quarter, taking the total employee count to 337,034, up by over 13,600 compared to Q3FY25.

“One of the most significant large deals we won was with the National Health Service in the UK. This $1.6 billion deal expands our work in the healthcare sector. We will help NHS leverage AI to streamline operations and improve patient care for UK citizens. We've deepened our Topaz AI capability with an agent services suite called Topaz Fabric. This suite helps our clients manage and implement AI agents across the enterprise,” said Salil Parekh, CEO & MD, on the highlights of the quarter.

Guidance Revision

Infosys revised its annual revenue guidance for FY26 from the earlier 2–3% to 3–3.5% for the year. According to the company, the revision was driven by large deals over the past quarters, improved momentum visibility in sectors such as financial services, energy and utilities, and anticipation of an uptick in other verticals.

“We see a good outlook even as we look into the next financial year, and that has in part helped us increase the guidance for this financial year ending in March,” said Parekh.

Demand environment and pricing

Infosys is bullish on the overall demand environment, with the large-deal pipeline remaining healthy, especially in industries such as financial services, energy resources, and utility services, where AI integration is actively being pursued.

“There's good adoption of AI across the spectrum with our large financial services clients,” said Parekh.

On pricing, the company said that pricing has been consistently accretive on the back of several factors, including AI, Project Maximus, and new-generation pricing models. Especially in AI-led projects, “We are seeing multiple new pricing models evolving. Some of them are being led by us. Whether it is outcome-based pricing or pricing specific to agents, it is a little early to call out what pricing models will eventually evolve, but everybody is testing new pricing models at this point in time,” said Jayesh Sanghrajka, CFO.

Impact of the new labour code

Like other peers, Infosys too took a one-time hit on account of the new labour laws. Infosys registered a ₹1,289 crore cost in Q3FY26 towards provisions arising from notifications by the Government of India on labour codes. The company does not expect any additional provisioning in the coming quarter.

Explaining the impact, Sanghrajka said, “Whatever is to be accrued till this quarter has been accrued in the books. The labour code has an impact across multiple aspects, whether it is gratuity or other wage-related aspects, and that has been accrued. There will be an ongoing impact of roughly around 15 basis points on an annual basis, which is the regular impact of the labour code.”