Did Infosys’ Q1 net profit decline sequentially to Rs 6,924 crore while revenue increased?
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Synopsis
Infosys reported a slight dip in net profit for Q1, but year-on-year figures show a promising rise. Revenue growth and large deal acquisitions indicate a strong performance amidst challenges in certain sectors. Explore how this impacts the IT giant's future outlook.
Key Takeaways
- Net profit decreased by 1.61% QoQ to Rs 6,924 crore.
- Year-on-year profit increased by 8.7%.
- Revenue grew by 7.5% YoY to Rs 42,279 crore.
- Operating margins at 20.8%, with expectations to maintain 20-22% for FY26.
- Acquired $3.8 billion in large deals, with 55% from new clients.
Mumbai, July 23 (NationPress) The IT services powerhouse Infosys announced a 1.61% decrease in net profit on a quarter-on-quarter (QoQ) basis for the April–June quarter, recording Rs 6,924 crore compared to Rs 7,038 crore in the preceding March quarter (Q4 FY25).
However, when viewed on a year-on-year (YoY) basis, the firm achieved an 8.7% increase in net profit, as disclosed in its filing to the stock exchange.
The company’s revenue climbed by 7.5% YoY to Rs 42,279 crore, with a sequential increase of 3.3%, up from Rs 40,925 crore in Q4 FY25.
In terms of expenses, Infosys reported a slight rise to Rs 33,581 crore in Q1, compared to Rs 32,452 crore in the prior quarter.
Additionally, Infosys’ gross profit improved to Rs 13,055 crore, an increase from Rs 12,138 crore recorded in the same quarter last year.
The company has adjusted its full-year FY26 revenue growth forecast to a range of 1-3% in constant currency, raising the lower limit of its expectations.
CEO and MD Salil Parekh stated that the Q1 results demonstrate the company’s capabilities in enterprise AI, client consolidation, and the commitment of its workforce exceeding 3 lakh employees.
During this quarter, Infosys secured $3.8 billion in major contracts, with 55% of these deals originating from new clients, thereby reinforcing its position in the international IT landscape.
On the operating margin front, Infosys reported a margin of 20.8% in Q1, which is a slight decline of 0.3% YoY and 0.2% QoQ. Nevertheless, the company is optimistic about sustaining its margins within the 20–22% range for FY26.
Among its business segments, financial services led the growth with a 5.6% YoY increase in constant currency (CC) terms.
The manufacturing sector also exhibited robust growth at 12.2%, while retail and high-tech sectors showed modest advancements.
Conversely, the life sciences segment saw a 7.9% decline, and other sectors contracted by 15.3%.
Infosys also reported strong free cash flow of $884 million, achieving cash flow conversion exceeding 100% for the fifth consecutive quarter.
CFO Jayesh Sanghrajka noted that the impact of currency fluctuations was effectively managed due to Infosys’ proactive hedging strategy.
On the workforce front, Infosys experienced a slight uptick in voluntary attrition, which increased to 14.4% in Q1 from 14.1% in Q4, and 12.7% in Q1 FY25.
As of the end of June 2025, the company’s workforce reached 323,788 employees, reflecting a net addition of 210 employees during the quarter and a year-on-year increase of 8,456.
On the NSE, Infosys shares closed 0.8% lower at Rs 1,558.9 on Wednesday, just before the earnings report.
Point of View
It is crucial to highlight that Infosys' recent performance demonstrates resilience despite a slight decrease in quarterly profits. The year-on-year growth signals a robust recovery, underscoring the company's adaptability in a rapidly evolving IT landscape. NationPress remains committed to providing insightful coverage of such pivotal industry developments.
NationPress
23/07/2025
Frequently Asked Questions
What was Infosys' Q1 net profit?
Infosys reported a Q1 net profit of Rs 6,924 crore, reflecting a 1.61% decline sequentially.
How did Infosys perform year-on-year?
On a year-on-year basis, Infosys achieved an 8.7% increase in net profit.
What was the revenue growth for Infosys in Q1?
Infosys' revenue rose by 7.5% YoY, totaling Rs 42,279 crore.
How did Infosys manage its operating margins?
Infosys reported operating margins of 20.8% in Q1, maintaining confidence in the 20–22% range for FY26.
What challenges did Infosys face in different sectors?
While financial services and manufacturing sectors showed growth, life sciences declined by 7.9% and other segments contracted by 15.3%.
