Infosys ADR Jumps 10% on Raised FY26 Growth Guidance, Deal Wins
Overview
Infosys ADRs surged nearly 10% on the NYSE as the Indian IT services giant lifted its FY26 constant-currency revenue growth outlook to 3-3.5% from 2-3%. This positive revision follows a strong Q3 performance, marked by $4.8 billion in large deal wins, including a significant contract with the UK's National Health Service, and a rebound in hiring.
Infosys ADRs Surge on Stronger Growth Outlook and Deal Momentum
Infosys Ltd.'s American Depositary Receipts (ADRs) experienced a significant rally on early Wednesday trading in New York, jumping nearly 10% to approximately $19.20 on the NYSE. This surge followed the IT services exporter's decision to raise its revenue growth forecast for the fiscal year 2026 (FY26) in constant currency terms.
Upgraded Growth Guidance
The company's management revised its full-year growth guidance upwards to a 3% to 3.5% band, a notable increase from the previously projected 2% to 3%. This strategic upward revision signals a potentially improving demand environment for the global technology services sector, which has navigated several quarters of subdued client spending and delayed decision-making.
Strong Quarter Performance
For the December quarter, Infosys reported sequential constant-currency revenue growth of 0.6%, surpassing analyst expectations of flat growth. Despite a 9.7% quarter-on-quarter decline in net profit to ₹6,654 crore, largely attributed to a one-time ₹1,289 crore impact from new labor code provisions, the underlying operational performance showed resilience.
Deal Wins and Hiring Rebound
A key driver for investor optimism was the substantial rebound in deal activity. Infosys secured large deal wins totaling $4.8 billion in the quarter, a significant increase from the $3.1 billion recorded in the prior quarter. A notable 57% of these wins were attributed to net new contracts, bolstered by a substantial engagement with the UK's National Health Service. Furthermore, the company saw its headcount increase for the second consecutive quarter, reaching an 11-quarter high, while employee attrition eased to 12.3%.
