Bengaluru: India’s second largest IT service provider, Infosys Limited, has reported a 12.2% year on year increase in consolidated net profit to ₹7,769 crore for the first quarter ended June 30, 2026. Despite this, the company has trimmed its growth guidance to 1.5% -3% of revenues, from its earlier 1.5%-3.5% of revenues. According to the company, subdued discretionary spending by clients and persistent macroeconomic challenges could slow growth, forcing the company to lower its growth targets.
Causes of concern
While the company’s financials remain strong, with its operational revenues rising 14% year on year to ₹48,211 crore, the operating margins moved up slightly to 21.1% from its target range of 20-22%. During the quarter, the company won deals worth $3.6 billion, with 61% classified as net new contracts.
Despite these numbers, Infosys CEO Salil Parekh said slow decision-making from clients’ side and a one-time client decision have impacted its annual growth targets.
Leadership transition
Moving ahead, the Bengaluru-headquartered company has now announced a leadership transition, with CEO Salil Parekh to pass on the baton to designate Ashiss Kumar Dash on April 1, 2027 following board approval.
“Salil brought calmness and focus to the company and took it from $10 billion to $20 billion. His term comes to an end on March 31, 2027, and Infosys has been looking at his succession. Today the board appointed a new CEO, Ashiss Kumar Dash, who will take over from April 1, 2027,” the company’s chairman Nandan Nilekani said.
For CEO designate Dash, the immediate challenge would be to improve growth in slow performing sectors like retail and communications, while expanding its strengths in its AI businesses. The company will also be working to protect its profit margins and boost revenues, making them one of the biggest tests of his leadership.
