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Informist, Thursday, Oct. 16, 2025

 

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--Infosys: Client interactions show strong focus on deploying AI 
--CONTEXT: Comments by Infosys management in post-earnings analyst call 
--Infosys: Current employee utilisation at comfortable level 
--Infosys: Took measures to reduce dependence on H-1B visas over past years 
--Infosys: See AI-driven modernisation as a growth driver 
--Infosys: Most small deals focus on cost reduction, vendor consolidation 
--Infosys:Despite uncertain environ, no change in business model near-term 
--Infosys: Expect to close acquisition of Versent stake this year 
--Infosys: Expect third-party sales to be lower in FY26 vs FY25 
 

By Anjana Therese Antony and Akash Mandal

 

MUMBAI – Information technology major Infosys Ltd. does not expect the current uncertain macroeconomic environment to have any near-term impact on its business model. In the medium-to-long term, the model will change. The company has been working on localisation for quite some years in most of our markets outside India and US, the management said in a post-earnings call with analysts Thursday. Policies under US President Donald Trump's administration have held back US clients of Indian IT companies from spending on technology.

 

The management said the company has been reducing its dependence on H-1B visas over the last many years. The company got approval for around 2,000 H-1B visas between October 2024 and June 2025, according to data on the US Citizenship and Immigration Services website. This is sharply lower than the near 10,000 approvals it had received in the US financial year 2020. The US government follows Oct-Sept financial year. In September, the US government increased the one-time fee on H-1B visa to $100,000, raising concerns for Indian IT companies which send some of their employees to the US under this visa programme.  

 

The Bengaluru-based IT giant said small deal pipelines remain strong and there is no major change compared to the previous year. "There's nothing unusual to call out there," the management said. Many deals are focussing on cost reduction, vendor consolidation, and productivity enhancement, the management said. Infosys' large deal total contract value for the September quarter was $3.1 billion, lower than the $3.8 billion reported a quarter ago.

 

On its recently-announced stake acquisition in Australia-based Versent group, the company said it has not yet completed the acquisition as it awaits regulatory approvals. "We expect it to be closed in this year, but we do not know the exit timelines," the management said. In August, Infosys had said it will acquire 75% stake in the Australian digital transformation solutions provider.

 

Infosys expects seasonal headwinds to lead to lower growth in the second half of FY26. "...we expect seasonal factors to impact growth, low working days, furloughs, onset of new calendar year." This is one of the reasons why the company did not raise the upper end of its FY26 revenue growth guidance in constant currency terms. The company Thursday revised the guidance to grow 2-3% from 1-3?rlier. Many brokerages had expected Infosys to retain the 1-3% view, while three had expected the guidance to be revised to 2-3%.

The company said client interactions show strong focus on deploying artificial intelligence. "There are opportunities emerging in areas like semiconductor with a strong focus on leveraging gen (generative) AI. Our H1 (Apr-Sept) performance reflects resilience of our business model and agility of our execution capabilities." The company expects AI-led modernisation to drive growth going ahead.  

 

The IT player said the current employee utilisation of about 85% is at a comfortable level. The company's utilisation was 85.1% excluding trainees in the September quarter and was 82.2% including trainees. Its headcount rose by more than 8,000 to a total of 331,991, of which almost 40% are women employees.

 

On third-party items, the company said sales is expected to lower in 2025-26 (Apr-Mar) compared to the previous year. "We expect a similar trend to continue. So we do not expect unusual growth or any elevation in the third party in Q3," the management said. 

 

Infosys released its quarterly results after market hours Thursday. Its consolidated net profit rose over 6% sequentially to INR 73.64 billion and revenue grew 5% to INR 444.90 billion. Both the top line and bottom line figures were higher than the Street's expectation of INR 71.97 billion and INR 441.14 billion, respectively. Ahead of the results, its shares closed 0.2% lower at INR 1,471.50 on the National Stock Exchange.  End

 

Edited by Ashish Shirke

 

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