Infosys, India's second‑largest IT services firm, announced its second‑quarter FY2025‑26 results on Thursday, 16 October 2025. The numbers were eye‑catching: a consolidated net profit of Rs 7,364 crore – a 13.19 % jump year‑over‑year – and revenue between Rs 44,490 crore and Rs 44,990 crore, reflecting roughly an 8.8 % rise. Infosys Q2 FY26 Results AnnouncementBengaluru set the tone for what the market can expect this fiscal year.
Historical Context and Market Position
Infosys has been riding a wave of digital transformation demand since the post‑pandemic surge. In FY2024‑25 the firm posted a net profit of Rs 6,506 crore, so the latest figure marks the third consecutive quarter of double‑digit profit growth. The company’s operating margin held steady at 21 %, matching both Q1 FY26 and the same quarter a year earlier – a rarity in the fast‑moving IT services sector.
Industry observers had been wary after global headwinds in 2024, but Salil Parekh, CEO and Managing Director, has consistently emphasized the firm’s “unique market positioning and client relevance.” His comment during the earnings call underscored a shift from defensive posturing to an aggressive growth narrative.
Q2 FY26 Financial Highlights
- Consolidated net profit: Rs 7,364 crore (+13.19 % YoY)
- Revenue from operations: Rs 44,490‑44,990 crore (+8.55‑9 % YoY)
- Operating margin: 21 % (steady)
- Total headcount: 332,991 employees (up 2.8 % QoQ)
- Large‑Deal TCV: $3.1 billion, with 67 % net new business
The employee bump may look modest, but it reflects a strategic hiring push in cloud, AI, and cybersecurity – the three services lines that now account for roughly 45 % of new contracts. The $3.1 billion in large‑deal total contract value (TCV) is the highest quarterly figure since FY23, signaling that global enterprises are finally committing sizeable budgets to digital initiatives.
Dividend Declaration and Shareholder Impact
On the capital‑return front, Infosys declared an interim dividend of Rs 23 per equity share, up from Rs 21 the year before. The Board of Directors met on 15‑16 October 2025 to approve the payout, setting the ex‑dividend date for Monday, 27 October 2025 and the actual payment for 7 November 2025.
At the close of trading on 24 October 2025, the stock was quoted at Rs 1,536.80, giving an interim dividend yield of about 2.80 %. Over the last 12 months, the cumulative equity dividend sits at Rs 43 per share, translating to a striking 460 % interim dividend rate for the quarter – a figure that caught many income‑focused investors off guard.
Investors who want to reap the Rs 23 dividend need to own shares by 26 October 2025; otherwise they miss out. The announcement came alongside a handful of other Indian corporates offering similar dividend payouts, turning the day into a “dividend‑rich” session on the NSE.
Revised FY26 Guidance and Market Outlook
Perhaps the most consequential tweak was the upward revision of FY26 revenue growth guidance. Previously, the firm had pegged growth at 1‑3 %; now the lower bound moves to 2 % while the top end stays at 3 %. The margin outlook remains 20‑22 % for the full fiscal year.
This nudge suggests the management’s confidence in securing more high‑margin contracts, especially in the aerospace‑defense and banking sectors where Infosys has recently won several multi‑year deals. Analysts at Morgan Stanley revised their target price to Rs 1,750, citing the stronger guidance and the sustained operating margin.
Still, skeptics point out that a 2‑3 % growth rate is modest compared to peers like TCS, which is forecasting 4‑5 % for FY26. The differing outlooks have reignited the age‑old debate about scale versus profitability in Indian IT services.
Expert Commentary and Future Outlook
Rashmi Sharma, senior analyst at Nuvama, noted, “Infosys’s focus on net‑new large deals is a healthy sign. The 67 % net new proportion shows they’re not just rolling over existing contracts.” She added that the hiring surge in AI‑focused roles could boost margins in the second half of FY26.
From a macro perspective, the Reserve Bank of India’s latest monetary policy, which kept repo rates unchanged, is expected to keep corporate spending on technology projects stable. Coupled with a softer rupee, the dividend payout becomes even more attractive for foreign investors seeking yield.
Looking ahead, the company’s next big test will be the Q3 FY26 results, slated for January 2026. Market watchers will be keen to see if the large‑deal pipeline can translate into a 3 % top‑line growth, pushing the guidance ceiling higher.
Key Facts
- Net profit Q2 FY26: Rs 7,364 crore (+13.19 % YoY)
- Revenue: Rs 44.5‑44.99 crore (+8.8 % YoY)
- Interim dividend: Rs 23 per share (ex‑date 27 Oct 2025)
- FY26 revenue guidance: 2‑3 % growth, margins 20‑22 %
- Large‑deal TCV: $3.1 billion, 67 % net new
Frequently Asked Questions
How does the new dividend affect long‑term shareholders?
The Rs 23 interim dividend raises the annualized payout to roughly 2.8 % based on the current share price. For investors holding shares beyond the ex‑date, the higher cash return improves total return, especially in a low‑interest‑rate environment. It also signals management’s confidence in cash flow stability.
What drove the 67 % net‑new business in large‑deal TCV?
A combination of fresh cloud‑migration contracts, AI‑driven automation projects, and a few marquee digital‑transformation wins in banking and aerospace pushed net‑new bookings. These sectors are currently in a spending surge as they modernise legacy systems.
Why did Infosys lift its lower‑end revenue guidance?
Management cited a stronger than expected order intake in Q2, particularly in high‑margin cloud services. The revised guidance reflects confidence that the current pipeline will translate into tangible revenue by year‑end.
How does Infosys’s outlook compare with its main competitor TCS?
TCS has projected 4‑5 % FY26 revenue growth, a notch above Infosys’s 2‑3 % range. Analysts attribute the gap to TCS’s larger scale in emerging markets and a slightly higher proportion of legacy maintenance contracts, which boost short‑term top‑line figures.
What should investors watch for in the upcoming Q3 FY26 results?
Key indicators will be the continuation of large‑deal net‑new bookings, margin stability, and any sign of acceleration in AI‑focused services. A breach of the 3 % growth ceiling could prompt another upward revision of FY26 guidance.
