Are Infosys Ltd latest results good or bad?

The latest financial results for Infosys Ltd reflect a mixed operational performance for the quarter ending December 2025. The company reported net sales of ₹45,479 crores, which represents a sequential growth of 2.22% and a year-on-year increase of 8.90%. This marks the seventh consecutive quarter of positive revenue growth, indicating the company's ability to capture market share amid recovering demand. However, the pace of growth has moderated compared to the previous quarter's 5.23% expansion, suggesting a potential stabilization in deal conversion cycles.
In terms of profitability, Infosys faced challenges as consolidated net profit declined to ₹6,654 crores, a decrease of 9.64% sequentially and 2.23% year-on-year. This decline is attributed to margin compression and rising employee costs, with the operating margin (excluding other income) contracting to 23.38% from 23.68% in the previous quarter. The profit after tax (PAT) margin also saw a reduction, indicating that cost management remains a critical focus area for the company.

Despite these challenges, Infosys continues to demonstrate strong capital efficiency with a return on equity of 27.22% and a robust balance sheet, holding zero long-term debt and substantial cash reserves. The company’s financial flexibility positions it well for ongoing capital allocation to shareholders through dividends and buybacks.

Following the results, there was an adjustment in the company’s evaluation, reflecting the complexities of balancing growth investments with profitability in a competitive market. Overall, while revenue growth remains healthy, the decline in profitability and margin pressures highlight the need for ongoing attention to cost management and operational efficiency.