Infosys Q3 Results Preview: Will New Labour Codes Dent Second Largest Indian Tech's Net Income Like TCS, HCL?

Infosys, the second largest IT company of India, is going to declare its Q3 results for FY26 on January 14. In the third quarter, experts believe that Infosys could record flattish dollar sales on qoq basis, while EBIT margins are expected to expand gradually. Infosys is expected to raise its revenue growth guidance for the last quarter of FY26. Investors could focus on tech spend outlook, AI revenue performance, and incremental benefits from Project Maximus. Infosys peers like TCS and HCL Tech have already declared their Q3 results where they recorded statutory impact of new labour codes. It will be keenly watched if new labour laws dents Infosys profitability.

Also, both TCS and HCL Tech have declared hefty dividends after Q3 results despite huge decline in their profitability. Investors will also look forward for dividend rewards from Infosys as well.

Infosys Share Price:

At the time of writing, Infosys share price traded at Rs 1601.75 apiece on BSE, up by 0.24% with market cap of Rs 6,65,473.93 crore. The stock is near its intraday high of Rs 1610.95 apiece.

Infosys Q3 Results Expectations:

Analysts at Kotak Institutional Equities forecast a revenue decline of 0.25% qoq, primarily due to lower billing days and the absence of mega deal wins in earlier quarters. However, they do not assume any incremental revenues from the sale of third-party items. But these analysts predict that EBIT margin could improve qoq primarily driven by benefits from Project Maximus.

In terms of deals, Kotak forecast Infosys to report large deal TCV of US$4.5-5 billion (~2X yoy), led by GBP1.2 billion mega deal win from NHSBSA.

Further, they predict Infosys will revise FY2026E revenue growth guidance to 2.5-3.0% (from 2-3%). The guidance will imply (-)2% to flat revenues qoq in 4QFY26. Kotak's guidance estimate does not include the Versent Group acquisition, which is yet to close.

Meanwhile, analysts at Equirus expect flattish US$ Sales growth qoq (CC: +0.2% qoq growth). EBIT margins are expected to increase by 20bps qoq led by currency benefits, cost/revenue efficiencies through project Maximus to be partly compensated by headwinds from furloughs and lower billing days.

They also expect Infosys to guide for 2.5-3.0% CC growth in US$ Sales in FY26E without factoring inorganic growth from announced M&A of Versent Group (vs. current guided growth of 2-3% without factoring inorganic growth contribution from Versent Group) with no change in its EBIT margin guidance (20-22%) for FY26E. Additionally, they expect material qoq jump in large deal TCV given mega deal win announcement in Oct 2025.

Infosys Q3 Results Key Focus Area:

As per Equirus analysts, key things to look out for in Infosys results are --- demand outlook in 4QFY26E and beyond, deal pipeline esp. for large/mega size deals, client decision making, pricing trends, details/assumptions for 4QFY26E Sales and EBITM guidance and dependency on H1B visas.

In Kotak's opinion, key things to watch out are --- (1) tech spend outlook for CY2026, (2) competitive intensity and pricing pressure in large deals, (3) the willingness of clients to take up large transformation programs that are margin-dilutive initially, (4) the pace of enterprise AI adoption and the resultant pricing and deflationary pressure and (5) incremental benefits that can accrue from Project Maximus.

During Q2FY26, Infosys reported consolidated PAT of Rs 7,364 crore, compared to Rs 6,506 crore in Q2FY25 and Rs 6,921 crore in Q1FY26. While its consolidated revenue of Rs 44,490 crore in Q2FY26 versus Rs 40,986 crore in Q2FY25 and Rs 42,279 crore in Q1FY26. In constant currency, revenue growth stood at 2.2% QoQ and 2.9% YoY. Its operating margin came in at 21%.

In October last year, in its guidance for FY26, Infosys is estimating revenue growth of 2%-3% in constant currency, while its operating margins are predicted between 20%-22%.

Should You BUY Infosys Stock?

Equirus has positioned LONG bet on Infosys with target price of Rs 1,695. While Kotak has recommended BUY with target price of Rs 1,800.

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