Infosys might grow more than management’s expectations
On Wednesday, Infosys management clarified that its 3-3.5% growth target on constant terms does not include proceeds from the Telstra acquisition. In August, Infosys spent $150 million to acquire a 75% stake in Versent, a Telstra-owned company with revenue of $138 million for the year ending June 2025. Infosys had stated that it expects to complete the acquisition in the second half of the current financial year.
“Strong year-to-date performance and solid deal wins have led us to revise our revenue forecast upwards to 3% to 3.5% for FY26. This does not include any revenue from the joint venture with Telstra, which is still awaiting regulatory approvals,” Infosys CEO Salil Parekh said during the company’s post-earnings call with analysts on Wednesday. said Salil Parekh, managing director, Infosys.
Promise less, deliver more
This means the company could grow faster than expected; one analyst even predicts Infosys’ growth will keep pace with HCL Technologies Ltd.
“Infosys has always been conservative in its guidance and has gone above and beyond. We expect revenue growth of at least 0.2% from the Telstra acquisition in the financial year,” said Amit Chandra, vice president at HDFC Securities.
In nine of the last 15 years IT services According to Chandra, the company grew more than management’s full-year guidance issued from January to March.
A second analyst also highlighted Infosys’ conservative approach to management.
“The asking rate for the lower/upper end of the FY26 revenue growth forecast for Q4 is between -1.7% and +0.2%, which should not be a difficult task,” Elara Capital analyst Sameer Pardikar wrote in a Jan. 15 note.
“The Versent acquisition is expected to be completed in the second half of FY26, subject to regulatory approvals. If the acquisition closes in January, Infosys could get an incremental contribution of $20-30 million or 0.1% to 0.2% up front on the acquisition,” said Karan Uppal, principal analyst, IT services, Phillip Capital.
But growth could be challenging for Infosys. According to a Mint In its analysis of company financials, Infosys has been reporting a sequential 2% revenue decline in the fourth quarter for the last three years. The company closed January-March 2025 with $4.73 billion; This represents a sequential revenue decline of 4.23%.
Analysts still expect the company to outperform.
HCL Technologies expects growth between 4% and 4.5% in constant currency terms. A fixed currency eliminates the impact of foreign exchange movements.
like infosys HCL Technologies it also disregarded the businesses of three companies it acquired: HPE’s Telco Solutions Business, Jaspersoft and Wobby. This is because HCL Technologies expects to complete these acquisitions in the next fiscal year or after April 1.
Different approaches
“We do not expect HCL’s HPE acquisition (Telco Solutions) to close until March this year as announced in December last year and the company has stated that it will take 6 months to complete all regulatory approvals. It will most likely be completed by June 2026,” said Uppal, adding that the acquisitions will contribute significantly to revenue in FY27.
This week, Tata Consultancy Services Ltd, Infosys and HCL Technologies reported better-than-expected growth, but the Big Three’s profitability has taken a hit due to the New Labor Code, which mandates that employees’ basic pay be half their total remuneration. This has led to an increase in statutory payments, such as relief funds and gratuities, to companies.
TCSInfosys and HCLTech finished the latest quarter with revenues of $7.51 billion, $5.1 billion, and $3.79 billion, respectively, reporting revenue growth of $0.6%, $0.5%, and $4.1%, respectively.
Significantly, third-quarter earnings formed a key element in HCL Technologies and TCS’ approach; This approach does not provide guidance and is expected to finish the fiscal year with full-year revenue declines, a first since the company went public in 2004.
“I believe there is little value in waiting for past or projected discretionary spending to continue. Instead, as I mentioned earlier, the focus should be on the opportunity, proactively identifying where spending is occurring and targeting those opportunities,” C. Vijayakumar, HCLTech’s chief executive, said at the company’s post-earnings press conference on Monday.
Vijayakumar also said the company is looking at offering solutions for edge inference to customers spending more on data centers, robotics, physical AI, semiconductors and silicon.
In contrast, management at the nation’s largest information technology (IT) outsourcing provider stood firm in its comment.
Key Takeaways
- Infosys’ estimate of 3-3.5 per cent is likely at a base level as it does not include the Versent acquisition, which could add 10-20 basis points to the estimate.
- Analysts highlight that Infosys has exceeded its guidance in 9 of the last 15 years.
- The new Labor Code is the primary threat to profitability as it increases regulatory burdens on the Big Three.
- While HCLTech has aggressively targeted New Technologies such as artificial intelligence and robotics, TCS has been cautious, accepting that growth is now an aspiration rather than a certainty.
- Both Infosys and HCLTech generated significant revenue from acquisitions pending in late FY26 or early FY27.
increasing demand
“We had said that in the second quarter (July-September 2025), the overall demand environment improved compared to the first quarter, so this trend continued in the third quarter,” TCS CEO K. Krithivasan told analysts in the post-earnings conference call on Monday.
In April last year, TCS, which generates over 94% of its business from outside India, said it remains ‘confident’ that its international business will grow faster in the current financial year than in 2024-25. On Monday, Krithivasan told analysts on a post-earnings call that the company’s ‘desire’ for its international business to grow faster than in FY25 remains.
