Infosys is set to announce its fourth quarter earnings for FY25 on April 17. Despite sequential revenue growth in the previous quarter, the IT major is likely to post a weak performance this time, with flat or even negative revenue growth amid rising economic uncertainties triggered by recent US government tariff policy changes.
These developments could affect client decision-making and delay a recovery in discretionary spending. The manufacturing (including auto), retail, and CPG verticals are expected to be affected the most. A conservative FY26 guidance may set the tone for the upcoming earnings season. The company may revise its revenue growth guidance downward to 2–5 per cent year-on-year (y-o-y) in constant currency (CC) terms.
Here are some other performance indicators:
Revenue growth
Amid a weak macro environment and a seasonally weak quarter, revenue is expected to remain stagnant at around ₹41,617–₹42,360 crore, according to a poll of brokerages, with quarter-on-quarter (q-o-q) growth ranging from -1.4 to 0.5 per cent and y-o-y growth between 9.7 and 10.6 per cent. In Q3, the company recorded a revenue of ₹41,764 crore.
Margin & Guidance
Infosys is likely to record earnings before interest and tax (EBIT) margin of 20.4 per cent – 21.1 per cent, according to the poll of brokerages.
“We expect EBIT margin to decline by around 50 basis points (bps) on headwinds from senior management wage hikes, visa costs, and negative revenue growth leverage. This would be partially offset by tailwinds from favourable currency movements and normalisation of the cost of third-party software licenses. This implies a full-year margin of 21.1 per cent, within the guidance range of 20-22 per cent,” shared an ICICI Securities report.
In Q3, Infosys revised its FY25 revenue growth guidance yet again to 4.5-5 per cent in constant currency (cc) terms from Q2’s 3.75-4.5 per cent. A Nuvama Institutional Equities report predicted the company will announce an FY26 revenue growth guidance of 2–5 per cent CC y-o-y.
Deals & TCV
Brokerages predict the deal TCV to be in line with the quarterly average run-rate of $2.5-3.5 billion. The TCV number is likely to be muted due to the absence of large mega deals with cost optimization deals expected to continue.
Attrition & Hiring
In Q3, Infosys’ total headcount was recorded at 3,23,379, an increase of over 5,590 from last quarter’s 3,17,788. The company is on track to hire 15,000 freshers in FY25, with plans to hire around 20,000 freshers in FY26, according to a report by ICICI Securities. However, in the fourth quarter, the company also drew attention for letting go of nearly 400 trainees.
Commenting on the larger IT ecosystem, a Motilal Oswal Financial Services (MOFSL) report noted that a 50 per cent probability of a US recession suggests the next 3-6 months could bring further earnings cuts, withdrawn guidance, and a freeze in tech spending.
Brokerages also noted fading hopes of a rebound in discretionary spending, with the current macro uncertainty further pushing the recovery cycle.
Published on April 7, 2025
