New Delhi, Jan 14 (PTI) IT services major Infosys on Wednesday reported a 2.2 per cent decline in consolidated net profit to Rs 6,654 crore in December quarter FY26, primarily weighed down by a one-time exceptional hit of Rs 1,289 crore from the implementation of new Labour Codes.
The company had posted a net profit (attributable to owners of the company) of Rs 6,806 crore in the same period last year.
The Bengaluru-headquartered firm saw its revenue from operations grow by 8.9 per cent to Rs 45,479 crore in the third quarter of the current fiscal, from Rs 41,764 crore in the year-ago period.
The company has raised its revenue growth guidance for FY26 to 3-3.5 per cent in constant currency, from 2-3 per cent earlier.
The Infosys board has approved the grant of annual time-based stock incentives in the form of Restricted Stock Units (RSUs) to CEO and MD Salil Parekh, holding a market value of Rs 3 crore.
A significant highlight of the Q3 FY26 results was the impact of the Government of India’s notification regarding the Labour Codes on November 21, 2025.
“These Labour Codes consolidate 29 existing labour laws into a unified framework governing employee benefits during employment and post-employment, and amongst other things, introduce changes, including a uniform definition of wages and enhanced benefits relating to leave.
“The adjustments for Labour Codes represent an increase in gratuity liability arising out of past service cost and an increase in leave liability, together by USD 143 million (Rs 1,289 crore), which is recognised in the Consolidated Statement of Comprehensive Income,” Infosys said in a regulatory filing.
There will be a growing impact of the Labour Codes of roughly 15 basis points on an annual basis, the company said.
Earlier this week, larger rival Tata Consultancy Services (TCS) said the implementation of the new labour codes during the quarter led to a “statutory impact” of Rs 2,128 crore, while Noida-headquartered HCLTech made a one-time provision of USD 82 million (Rs 719 crore) for the implementation of new Labour Codes.
On the quarter-on-quarter basis (Q2 FY26), Infosys’ profit fell 9.6 per cent, while revenue increased 2.2 per cent.
During the quarter, Infosys clocked a large deal TCV (Total Contract Value) of USD 4.8 billion, with 57 per cent of it being net new. A significant deal Infosys signed was with the National Health Service in the UK, which brought in USD 1.6 billion.
Infosys CEO Salil Parekh exuded confidence in the company’s run to become an AI frontrunner and said that a strong momentum is being observed in AI adoption across Infosys’ client base.
“Today, we work with 90 per cent of our largest 200 clients to unlock value with AI. We’re currently working on 4,600 AI projects. Our teams have generated over 28 million lines of code using AI. We’ve built over 500 agents, we are scaling our forward-deployed engineer team,” he said during the company’s earnings call.
He referred to six emerging AI-led value pools – AI engineering services, data for AI, agents for operations, AI software development & legacy modernisation, AI deployed in physical devices, and AI trust and risk services – that could unlock a large incremental opportunity.
“We believe we are uniquely positioned to capture market share across these value pools and emerge as the leading AI value creator for global enterprises.” Parekh foresees a good demand outlook in the current and next fiscal years and believes the company’s large deals pipeline remains healthy, particularly in financial services, energy resources, and utility services. He added that the company has a good pipeline of potential acquisitions.
On the H-1B visa front, Infosys stated that no company employee has been arrested by any US authorities, adding that, a few months ago, in a single isolated incident, one employee was denied US entry and returned to India.
“No Infosys employee has been apprehended by any US authority. A few months ago, one of our employees was denied entry into the US and was sent back to India,” Parekh said.
Infosys will continue its approach of using a mix of employees in India and the US for deployments and delivery.
Infosys completed its largest-ever buyback of Rs 18,000 crore and paid out an interim dividend during the October-December quarter.
On the employee front, the total headcount increased by 5,043 during the quarter to reach 3,37,034.
CFO Jayesh Sanghrajka said the company is on track to complete its FY26 hiring target of 20,000 freshers, and has already onboarded close to 18,000.
Shares of Infosys settled at Rs 1,599.05 apiece on the BSE on Wednesday, 0.07 per cent higher than the previous close.
The financial results were announced after market hours. PTI ANK ANK ANU ANU
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