Infosys Q4 FY25: Profit falls, FY26 guidance in focus

Why Infosys’ Q4 print matters

Infosys is India’s second-largest IT services exporter, and its March-quarter performance is closely tracked for cues on global tech spending and outsourcing demand. The company’s Q4 FY25 results show a split picture: revenue grew year-on-year, but profitability weakened. Alongside the reported numbers, investor attention has been on how margins hold up amid wage hikes and visa-related costs. Another key variable has been FY26 guidance, where brokerages had expected a muted outlook due to macro uncertainty and tariff-related tensions.

Headline Q4 FY25 numbers

Infosys reported revenue of ₹40,925 crore in Q4 FY25, up 8% year-on-year. Net profit came in at ₹7,033 crore, down 12% year-on-year, which was described as slightly below market expectations in the source material. Operating margin for the quarter was listed at 21%, up 0.9% year-on-year. The company also announced a final dividend of ₹22 per share.

Sequential trend: revenue dip, profit broadly steady

On a quarter-on-quarter basis, the picture was mixed. Net profit was noted at ₹7,030 crore, up 3.3% sequentially. Revenue dipped by 2% from ₹41,764 crore in Q3 FY25 to ₹40,928 crore in Q4 FY25. The sequential revenue softness was aligned with repeated references to a seasonally weak March quarter and fewer billing days in some brokerage notes.

Margins: wage hikes and visa costs in focus

Even as the year-on-year operating margin showed an improvement in the reported highlights, the coverage also pointed to sequential pressure. It stated that operating margin declined 0.3% sequentially in Q4. Broker commentaries cited salary hikes for junior employees and higher visa-related costs as key drivers of margin compression. Some notes also pointed to offsets such as cost optimization, lower third-party expenses, and efficiency gains under Project Maximus.

Dividend details and key dates

Infosys announced a final dividend of ₹22 per share for FY25. The record date was set for May 30, 2025. Dividend payment was expected by June 30, 2025. The announcement was positioned as part of shareholder returns despite pressure from global market conditions.

What brokerages were projecting for Q4

Estimates in the coverage varied across brokerages, reflecting uncertainty on the demand and cost outlook. Based on the average estimate of seven brokerages, revenue from operations was projected to grow 10% year-on-year. Profit expectations had a wide range, from a 10% year-on-year increase to a 19% year-on-year decline.

Specific forecasts highlighted included Motilal Oswal projecting 10% year-on-year growth in PAT, while JM Financial expected around a 19% decline and Nuvama anticipated a 16% drop year-on-year. Choice Broking expected PAT to decline 17.4% to ₹6,580 crore. Bloomberg-tracked consensus in the text projected Q4 revenue of ₹42,126 crore (up 1% sequentially) and net profit of ₹6,697 crore (down 2% sequentially), with EBIT of ₹8,696 crore and margin of 20.6%.

Deal wins and TCV: a key swing factor

Deal momentum, particularly large deal wins, was repeatedly flagged as a swing factor for FY26. Kotak Institutional Equities forecast large deal TCV of $1 billion and noted it would mark a year-on-year decline, with focus on ACV (annual contract value) of deal wins. The coverage also pointed to muted large deal wins over the past three quarters, keeping investor focus on the strength of the pipeline and the pace of closures. Broker notes referred to delays in closures due to slower client decision-making.

FY26 guidance: muted growth ranges dominate

On outlook, the coverage included both company guidance and brokerage expectations. It stated Infosys set FY26 revenue growth guidance of 0% to 3% in constant currency terms, reflecting a cautious stance amid an uncertain macro environment. It also cited an operating margin target of 20% to 22%.

Separately, brokerages were described as expecting guidance bands such as 1% to 4% constant currency growth (Kotak) and 2% to 5% (Motilal Oswal, Nuvama, and others referenced). The muted tone was attributed to a deteriorating macro environment linked to tariff wars and the absence of mega-deal contributions unlike FY25.

Stock context ahead of results

The stock reaction and positioning were also highlighted. After market hours on April 16, Infosys shares ended at ₹1,413, down 1% on the BSE ahead of the results. Market capitalisation was stated at ₹5,86,856.13 crore. The stock was described as nearing its 52-week low of ₹1,307.10.

Key metrics snapshot

What investors are watching next

The coverage listed several watchpoints: tariff impact on business demand, TCV trends, FY26 guidance, and margin levers for FY26. Commentary on client discretionary spending amid macro volatility in the US, program cancellations, and pricing pressure tied to AI-driven efficiency were also cited. Within verticals, BFSI demand trends were highlighted, with one note stating discretionary demand in financial services was expected to remain stable.

Conclusion

Infosys’ Q4 FY25 showed resilient year-on-year revenue growth, but a decline in profit kept attention on cost pressures and margin management. The final dividend schedule provides near-term clarity for shareholders, while FY26 guidance ranges remain the key signal for demand conditions. The next focus points remain constant currency growth expectations, margin delivery within the 20% to 22% band, and updates on large deal conversions and pipeline closure timelines.