Infosys Q1 FY27 Results (NSE: INFY)
Signal: Steady quarter
The read
Infosys delivered a solid Q1FY27 with revenue of ₹48,211 Cr (+14% YoY, +2.4% CC), operating margin expanding 30bps to 21.1%, and large deal TCV of $3.6 Bn (61% net new). Net profit of ₹7,769 Cr grew 12.2% YoY, with EPS of ₹19.19 (+14.9% YoY). Life Sciences and North America were key growth drivers; Retail remained weak. Free cash flow of ₹9,051 Cr underscores strong cash generation.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹48,211 Cr | 14.0% | 3.9% |
| EBIT | ₹10,163 Cr | 15.4% | |
| Net profit | ₹7,769 Cr | 12.2% | |
| EPS | ₹19.19 | 14.9% | |
| EBIT margin | 21.1% |
P&L walk
Revenue grew 14% YoY (2.4% CC) driven by large deal wins and volume growth. Gross margin improved 60bps YoY to 31.5% as cost growth lagged revenue. Operating margin expanded 30bps to 21.1% on better gross margin and cost control, partially offset by higher admin expenses (+19.7% YoY). Other income declined 7.7% YoY, and tax rate rose slightly, causing net profit growth (12.2%) to lag revenue growth. EPS grew 14.9% YoY, ahead of PAT growth, indicating share buyback benefits.
Segments
Life Sciences was the fastest-growing vertical at 26.3% YoY (24% CC), while Retail declined 1.5% YoY (-1.8% CC). Financial Services grew 2.9% YoY, Manufacturing 1.7% YoY, and Communication 2.5% YoY. North America grew 2.7% YoY (3.2% CC), Europe grew 4.8% YoY (2.8% CC), Rest of World declined 12% YoY.
Key positives
- Revenue grew 14% YoY (2.4% CC) to ₹48,211 Cr, driven by strong deal wins and volume growth.
- Operating margin expanded 30bps YoY to 21.1%, aided by gross margin improvement.
- Large deal TCV of $3.6 Bn, with 61% net new, indicating strong pipeline.
- Free cash flow of ₹9,051 Cr, up 20.2% YoY.
- EPS grew 14.9% YoY to ₹19.19, benefiting from share buyback.
- Voluntary attrition declined to 13.0% from 14.4% a year ago.
- AI revenue reached 8.2% of total, reflecting growing adoption.
Key concerns
- Retail segment revenue declined 1.5% YoY (1.8% CC), signaling weakness in discretionary spending.
- Other income fell 7.7% YoY, impacting PBT growth.
- Net profit growth (12.2%) lagged revenue growth (14%) due to higher tax and lower other income.
- QoQ net profit declined 8.6% from Q4FY26, partly due to high base from tax reversal in prior quarter.
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