Infosys shares slip 2% despite 13% YoY surge in net profit for Q2 FY26

Shares of Infosys tumbled 1.7% to their day’s low of Rs 1,447.35 on the BSE on Friday, October 17, even after the IT major posted a 13% year-on-year (YoY) increase in its consolidated net profit for the second quarter of FY26. The company reported a net profit of Rs 7,364 crore for the quarter, while revenue from operations rose 9% YoY to Rs 44,490 crore.

The results of the IT major were declared after the market hours, post which, the company’s American Depository Receipts (ADRs) closed 2.25% at $16.07. However, the after hours data shows a gain of 0.19% at $16.10.

Infosys, India's second-largest software exporter, also declared an interim dividend of Rs 23 per share and fixed October 27 as the record date for the same. In terms of profitability, gross profit for the quarter grew 9% YoY to Rs 13,690 crore.

In constant currency terms, revenues for the September quarter grew by 2.9% YoY and 2.2% on a sequential basis. However, operating margins declined by 10 basis points YoY to 21%.

The company revised its lower-end FY26 revenue guidance upwards from the earlier 1–3% to 2–3%. The operating margin guidance for the year was retained in the 20–22% range.

Commenting on the performance, Infosys CEO and MD Salil Parekh stated that the company has now delivered two consecutive quarters of strong growth, citing unique market positioning and client relevance as key drivers.

Here’s what domestic brokerage firm Nuvama said after the company’s Q2 results:

Nuvama has maintained a "Buy" rating on Infosys, revising its target price slightly downward to Rs 1,800 from Rs 1,850. The firm highlighted that Infosys’ revenue grew by 2.2% quarter-on-quarter (QoQ) and 2.9% year-on-year (YoY) in constant currency (CC) terms, surpassing the estimate of 1.8% QoQ growth.

The company's EBIT margin stood at 21%, reflecting a 20 basis points improvement QoQ and aligning with expectations. Infosys also revised its FY26 revenue growth guidance to a narrower range of 2–3%, compared to the earlier projection of 1–3%.

Total contract value (TCV) for the quarter came in at USD 3.1 billion, marking a decline of 19.3% QoQ but a 26% increase on a YoY basis. Nuvama noted that while deal wins were decent, growth was achieved on the back of a strong Q1, without any third-party boost.

EPS estimates for Infosys were marginally adjusted, with FY26 and FY27 EPS tweaked upward by 1.7% and 1.3%, respectively. Nuvama has also updated its valuation model, rolling forward to 23x FY27–28 price-to-earnings (PE) from the previous 25x.

Also read: Reliance Industries Q2 results preview: O2C, Jio to power 11% profit growth; retail seen lagging



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