Q1 2026 Infosys Ltd Earnings Call - Press Conference

Unknown Executive: the future of the game partnering with Infosys is about more than technology it's about building a stronger more connected future for tennis and helping open up the sport to new audiences in britain for each player for fans for communities we've stepped onto the court with the same passion for a decade we've shared moments and memories victories and breakthroughs and we'll keep playing because this isn't just a sport because when it's love all the best is yet to come Thank you very much!

Pass while inspiring the future of the game.

With emphasis is about more than technology. It's about building a stronger more connected, future for tennis and helping open up the sport to new audiences in Britain.

Each player for fans for communities. We've stepped onto the court with the same passion for a decade.

We've shared moments and memories victories and breakthroughs.

And we'll keep playing because this isn't just a sport because when it's love, all the best is yet to come.

Rishi Jhunjhunwala: Well, very good evening, everyone, and thank you for joining Infosys' first quarter financial results. My name is Rishi, and on behalf of Infosys, I'd like to welcome you today.

Rishi: A very good evening everyone and thank you for joining Infosys first quarter Financial results. My name is Rishi and on behalf of Infosys, I'd like to welcome you today.

Unknown Executive: As always, we request one question from each media house so that we can accommodate all of you over the next 45 minutes or so.

Salil Parekh: With that, let me invite our Chief Executive Officer, Mr. Salil Parekh, for his opening remarks. Over to you, Salil. Thanks Rishi, good afternoon and thank you all for joining us. We had a strong start to our financial year. Our revenues grew 2.6% sequentially and 3.8% year-on-year in constant currency terms. Growth was broad-based with our large five industry groups and our large geographies growing year-on-year in constant currency. Our large deals were at $3.8 billion. The main drivers of our growth were our leadership in enterprise AI and our continued success in clients selecting us for consolidations. We are seeing good demand for AI agents.

Speaker Change: As always, we request 1, question from each media house so that we can accommodate all of you over the next 45 minutes or so. Uh, with that, let me invite our chief executive officer, Mr, salil park for his opening remarks over to you Sal.

Salil: Thanks Rishi, uh, good afternoon and thank you all for joining us.

Salil: We had a strong start to our financial year, our revenues grew 2.6% sequentially and 3.8% year on year, in constant currency terms growth was broad-based with our last 5 industry groups and our large geographies growing year on year in constant currency.

Salil: A large deals were at 3.8 billion.

The main drivers of our growth were a leadership in Enterprise AI.

Salil: And a continued success in clients. Selecting us for consolidations.

Salil Parekh: We have built 300 agents across business, operations and IT areas, and they're now deployed within our clients. Our horizontal and vertical agents are helping our clients drive faster decisions, improve customer experience, and improve operational efficiency.

Salil: We are seeing good demand for AI agents. We have built 300 agents across business operations and it areas and they're now deployed within our clients.

Salil: Our horizontal and vertical agents are helping our clients drive faster decisions, improve customer experience and improve operational efficiency.

Salil Parekh: Based on our performance in Q1 and our current outlook, a guidance for growth for financial year 2026 is revised from where it was 0% to 3% now it will be 1% to 3% in constant currency terms. Our margin guidance remains unchanged at 20% to 22%. With that, Rishi, let's open it up for questions.

Salil: Based on a performance in q1 and a current Outlook.

Salil: A guidance for growth for financial year, 2026.

Salil: Is revised from where it was 0% to 3%. Now, it'll be 1% to 3% in constant currency terms,

Salil: Margin guidance remains unchanged at 20% to 22%.

Unknown Executive: We will now open the floor for questions.

Jayesh Sanghrajka: Joining Salil is Mr. Jayesh Sanghrajka, Chief Financial Officer, Infosys.

Ritu Singh: The first question is from Ritu Singh from CNBC TV18. Hi gentlemen, thanks very much for the question. You know, you're talking about how the numbers have been very strong, the performance has been good, the first quarter revenue is above what the street has factored in.

Rishi: With that Rishi. Let's open it up for questions. Thank you, Sal. We will now open the floor for questions. Joining salil is Mr. J, shangarh AKA Chief Financial Officer Infosys. The first question is from Ritu Singh from CNBC tv18,

Ritu Singh: Two questions on this, if the numbers are so good, why have you not raised the upper end of your guidance? Why just the marginal revision from 0.3% to 1.0% to 3.0%? And how much of this upward revision that we're seeing, including the kind of constant currency growth, 2.6% in this quarter, has come from your inorganic, you know, from your acquisitions that you've made? That's one part of the question.

Ritu Singh: Also, you know, how would you guide the street to look at these numbers? Would you really say this is a turnaround that you're seeing, you know, in the current macro environment that going ahead this kind of performance would be sustained?

Ritu Singh: And a word, you know, last time we didn't hear much from you on the whole tariff conundrum and how that is impacting discretionary spend. You know, specifically in sectors like manufacturing, retail, you know, what's your sense on, you know, the clients? And, you know, if you could also add a word on your hiring plans for the year.

Hi gentlemen. Thanks very much for the question. Uh, you know, we're talking about how the numbers have been very strong. The performance has been good. The first quarter revenue is above what the street has factored in uh 2 questions on this. If the numbers are so good. Uh, why have you not raised the upper end of your guidance? Why just the marginal revision from 03 to 1 to 3% and how much of this you know, upward revision that we're seeing and including uh the kind of constant currency growth 2.6% in this quarter has come from your inorganic, uh, you know, from your Acquisitions that you've made. Uh, that's 1 part of the question. Um, also, you know, how would you guide the street to look at these numbers? Would you really say this is a turnaround, uh, that you're seeing, uh, you know, in the current macro environment that going ahead. This kind of performance would be sustained and a word, you know, last time we didn't hear, uh, much from you on the whole tariff conundrum and now that is impacting

Unknown Executive: Thanks very much.

Salil Parekh: Thanks. So first, on the guidance, what we have seen this quarter is a strong performance in terms of where we have delivered the 2.6%, as you pointed out. With that and with the current outlook where we have seen a lot of the discussions on the economy worldwide, having come to more stable situations, but still seeing that it's not fully settled.

Rishi: Uh, discretionary spend, you know, specifically in sectors, like manufacturing retail. Uh, you know, what's your sense on? Uh, you know, the clients and uh, you know, if you could also add a word on your hiring plans for the year, thanks very much.

Thanks. Uh, so first uh, on the guidance, what we have seen this quarter

Salil Parekh: Given that we've increased the lower end of our guidance as we go closer into the like progress into the year, closer towards the end of the year, we typically narrow our guidance. And that's the first part of what we've done, which is increase the lower end. We still see things within our guidance where we look at some things which will give us good traction. For example, what we've seen in the consolidations. We've seen very strong work that we've done on AI with agents, and we see that. And we also see the economy globally, both in Europe, U.S., going through changes.

Salil Parekh: So keeping that in mind, we've narrowed the guidance and increased the lower end.

Jayesh Sanghrajka: On the inorganic part, I'll let Jayesh mention how much of it is inorganic. Yes, so inorganic in this quarter has been around 40 basis points within our 2.6% that we reported. And for the full year also, it will be similar numbers.

Rishi: Given that we've increased, the lower end of our guidance, uh, as we go closer, uh, into the uh, like progress into the year closer towards the end of the year, we typically narrow our guidance, and that's the first part of what we've done, which is increased, the lower end. We still see things within our guidance, where we look at some things, which will give us good traction. For example, what we've seen in the consolidations, we've seen very strong, uh, work that we've done on AI with agents and we see that. And we also see the economy globally, both in Europe us going through changes. So keeping that in mind, we've narrowed the guidance and increase the lower end on the inorganic part. I'll, I'll let Jesus mention how much of it is inorganic. Yeah, so uh, inorganic in this quarter has been around 40 basis points uh within our 2.6% that that uh we reported and for the full year also it'll be similar number.

Salil Parekh: Then back on the sort of economy, we talked about it last quarter, and also in addressing it today, there are overall changes in the economic environment. And we mentioned last quarter, we share that again, we see some of that impact, for example, in logistics, we see some in consumer products, and some in manufacturing. But equally, we have seen benefits, especially because we've seen good traction with the work we're doing with agents in AI, and a benefit from consolidation that we've looked at, that clients have looked at us and been positive. And that has given us some of the positive growth that we've seen in this quarter.

Rishi: The sort of economy we talked about it, uh, last quarter and also in addressing it. Today, there are overall changes in the economic environment. And we mentioned, uh, last quarter, uh, we we share that again. Uh, we see some of that impact, for example, in logistics, we see some in consumer products, uh, and some in manufacturing. Uh, but equally we have seen benefits, uh, especially

Rishi: Because we've seen good traction with the work we're doing with agents in Ai and a benefit from consolidation. Uh, that we've looked at that, the clients have looked at us and been positive. And, and that has given us some of the Positive Growth that we've seen in this quarter.

Would you want me to talk about?

Salil Parekh: So there on the acquisition as Jayesh shared, it's a small part of it, even if you keep that aside, we are well over 2%, 2.2% in terms of constant currency growth in the quarter.

Salil Parekh: The way I would look at it is it's very differentiated performance because we have what we believe to be one of the best ways that we are deploying AI, enterprise AI, into our clients. So these are active projects where we are using agents, different types of agents that clients are leveraging, whether it's in their supply chains, in their customer experience, where they're getting productivity benefits, where they're getting improved customer service. That's one aspect of it. And the other aspect is we are seeing clients are selecting us more and more when they're looking at consolidation, because inherently, we see clients see Infosys's delivery as very strong and stable, and also providing new ideas, especially on AI for improvements into their business.

Speaker Change: Sexual positivity. So there on the acquisition is J shared. Uh, it's a small part of it, even if you keep that aside, we are well over 2% 2.2 in terms of constant currency growth in the quarter.

Speaker Change: Um, the way I would look at it is is very differentiated performance because we have what we believe to be 1 of the best ways that we are. Deploying AI, Enterprise AI into our clients. So, these are active projects where we are using agents different types of agents that clients. That leveraging whether it's in their supply chains, in their customer experience, where they're getting productivity benefits where they're getting improved customer service, that's 1 aspect of it. And the other aspect is, we are seeing clients are selecting us more and more when they're looking at consolidation, because inherently we see clients,

Salil Parekh: So that's the differentiated performance that we're seeing in the way that we see it.

Speaker Change: See, Infosys is delivery as very strong and stable and also providing new ideas, especially on AI for improvements into their business. So that's the differentiated performance that we are seeing uh, in the way that we see it.

Salil Parekh: So if you look at our hiring numbers, our overall headcount has remained constant at this point in time. Our utilization is at its peak at 85%. So we will continue hiring and we expect to continue hiring in line with what we have announced at the beginning of the year. There is no change there.

Haripriya Suresh: The next question is from Haripriya Suresh from Reuters News.

Speaker Change: Uh hiring. So if you look at our, our hiring numbers, uh, our overall um, headcount has remained constant at this point in time. Uh, our utilization is that it speak at 85%. So we will continue uh, higher. Uh, and it's, you know, we expect to continue hiring in line with what we able to pronounce at the beginning of the year. There's no change there. Thank you. The next question is from Hari, Priya Suresh from Reuters News.

Haripriya Suresh: Good evening, gentlemen. One quick, I want to understand, America has not grown, growth has been sort of flattish, but Europe has grown really well. Just some color on the specific markets, is Europe blind specific, what is happening on that end?

Haripriya Suresh: And, you know, in terms of the employee headcount, like you mentioned, I know it's been flat, but is, I know there's a lot of talk about how Infosys is using AI. Do you see if utilizations at its peak, do you see productivity increasing where you don't need to hire as much going forward? And will this sort of be the level that we will see it at?

Jayesh Sanghrajka: And I want to get some color on what the wage hike scenario will be for this quarter as well. Thank you. So, coming to your second question on headcount, as I said earlier, headcount has remained flat, despite that we have been able to deliver 2.5%, 2.6% on growth, large part of that came from the RPP increase or the pricing increase that we got and the seasonality benefit that we got, 40 pips came from the acquisition and the balance came from the volume increases, which we've been able to manage within a current headcount through utilization. Now that we are at a peak, any further volume increase will need to be, you know, we do need to come from the hiring, right?

Speaker Change: Sort of flattish but Europe has grown really well. Just some color on the specific specific markets is your Appliance specific. What is happening on that end. Um and you know in terms of the employee headcount like you mentioned, um I know it's been flat but is I know there's a lot of talk about how emphasis is using AI. Do you see if utilizations at its peak? Do you see productivity increasing where you don't need to hire as much going forward? And will they sort of be the level that we will see it at? And I want to get some color on. What the wage hike scenario will be for this quarter as well. Thank you.

Jayesh Sanghrajka: So that's where we are. In terms of US and Europe, I think Europe has been strong footing for us for many quarters in the past. That's on the back of the investment that we made a few years back in Europe. We had identified Europe as a geography to invest into and, you know, all of that I think is working well across sectors. Why do you think that dramatically has changed between America and Europe? Because Europe is growing faster versus America, to that extent it's changing, but still US remains, you know, the largest sector for us, largest geography for us.

Speaker Change: Uh, you know, we don't need to come from uh, the hiring, right? So that's uh that's why we are uh in terms of uh us and Europe. Uh I think Europe has been strong uh footing for us for money, many quarters in the past. That's on the back of the investment that we made few years back in Europe. We had identified Europe as a geography to invest into and, you know, all of that. I think uh is working well uh across sectors and sorry.

Speaker Change: Because Europe is growing faster versus America to that extent, it's changing but still us remains uh you know the largest uh sector for us largest geography for us.

Speaker Change: Uh, sorry you had a third question.

Speaker Change: Uh, yeah. So we did a wage hike already first, uh, wage. I mean, first part was that effective January. The 2nd first is already rolled out effective April 1st. The impact of that is already baked in in the margin of this quarter. We had 100 basis points of impact on account of wage hike as well as the higher variable pay that we paid to this to our employees this quarter. So that's already done. Uh, having done the ways like very recently, uh, you know, next year next month we'll have to decide when

Beena Parmar: Next question is from Beena Parmar from the Economic Times. Hi Salil. You mentioned about the revenue being stronger. Some of your peers have pointed out that there has been some revenue cannibalization that they are seeing. Are you also witnessing it and are you seeing some productivity gains, benefits that you are passing on to your customers? And is that also leading to change in pricing? I think we spoke about it briefly, but has there been any change in the first quarter? And secondly, is that also impacting your margins? You know, what were the factors that led to the margins?

Bina Parmar: Thank you. Next question, is from Bina parmar from the economic Times. Hi sin.

Beena Parmar: Because I think it has declined. So could you...

Jayesh Sanghrajka: Let me start on the revenue one. I think... We are seeing with AI a lot of productivity benefits. We also saw productivity benefits that we were already working on from automation and lean, which were coming through. In addition to the productivity, which is making some of that benefit being shared with class. So these are two different factors. But on balance, we see an impact into the quality of the revenue that we are seeing. Unknown Executive, Chitra Nayak, Helene Potier, Yusuf Rangwala, Jas Bardia, Padmini Dhruvaraj, Reddappa Gundluru, Yu Lee, K Raj, Krishan Chadha, Vasudha Dakwe, Infosys Unknown Executive, Chitra Nayak, Helene Potier, Yusuf Rangwala, Jas Bardia, Padmini Dhruvaraj, Reddappa Gundluru, Yu Lee, K Raj, Krishan Chadha, Vasudha On the margin walk, if you look at the 20 basis points of decline, the puts and takes of that, 100 basis points of headwind came from compensation-related factors in the hike that we gave in April, as well as the higher variable pay that we pay to our employees or we'll pay to our employees for this quarter, 30 basis points was a headwind on account of currency, and 20 basis points was other factors.

Bina Parmar: Uh, uh, you mentioned about, uh, you know, the revenue being stronger. Uh, some of your peers have pointed out that, uh, there has been some Revenue cannibalization that they are seeing. Are you also witnessing it and, uh, are you seeing some productivity gains benefits that you're passing on to your customers? And is that also leading to change in pricing? I think we spoke about it briefly but you know, has there been any change in the first quarter and secondly is that also impacting your margins? Uh you know, what were the uh factors that led to the margins? Because I think it has declined.

Bina Parmar: So could you let let me start on the revenue 1? I think uh,

Bina Parmar: We are seeing with AI a lot of productivity benefits. We also saw productivity benefits that we were already working on from Automation and lean, which were coming through.

Bina Parmar: Typically uh all productivity benefits. Uh, a part of that is shared with clients uh and a part of that uh is shared with us. Uh we see if you look at the overall level, what Jesus was sharing? We have seen our productivity of our Revenue. The way our own pricing is working and a macro level, uh, improving. And this is more because we are doing work, which is creating more impact.

Bina Parmar: In addition to the productivity, which is making some of that benefit being shared with clients. So these are 2 different, uh factors. But on balance we see uh uh an

Bina Parmar: Uh, into the quality of the revenue that we are seeing now.

Bina Parmar: What kind of productivity gains you've been?

Bina Parmar: So there we are not.

Discussing the amounts we are passing on. But in terms of what we are seeing as a benefit, we are seeing between 5% and 15% through uh

Bina Parmar: AI programs where we are working with clients, where typically there are disparate systems internally. There are some things we've done which are slightly higher than that. But those are on internal. Like if you look at our clinical product, it's it's 1 uniform, sort of a, a code base in which we can get better better productivity.

Speaker Change: And the project. Yeah, and on the margin work, if you

Speaker Change: the 20 basis points of decline, the Putin takes of that of 100 basis points of headwind came from compensation related factors in

Jayesh Sanghrajka: This was offset by 70 basis points of pricing benefit that we got both seasonally as well as the benefit that Salil was talking about from productivity and everything that we've been doing under Project Maximus. 40 basis points came because of the acquisition-related impairment that we did in the last quarter that was a one-off in the last quarter, so that was a benefit this quarter, and 20 basis points because our third-party cost was lower. So, just to highlight, our 2.6% of growth was despite the fact that our third-party revenue and costs were lower by 60 basis points.

Speaker Change: Hike that we gave in April as well as the higher variable pay that we pay to our employees or we'll pay it to the employees for this quarter. Uh, 30 basis points were the headwind on account of currency, uh, and you know 20 basis points for other factors. Uh, this was offset by 70 basis points of pricing benefit that we got both seasonally as well as you know, the uh, the benefit that selling was

Unknown Executive: Just one question, you know, conversations with the clients, has it improved in terms of the business demand? And, you know, are you seeing that tariff related uncertainty or the caution is now over, and they are starting to kind of, you know, On a macro basis, what we see is there are clients, all clients are quite focused on enterprise AI, where we can show what is working, where it's working, especially with agents. Then there are industries, specifically logistics, consumer product, goods, manufacturing, where we see the impact of the changes in the economic situations, where we were at this time last quarter.

Speaker Change: Talking about from productivity and you know, everything that we've been doing under project Maximus, 40 basis points came because of the acquisition related uh uh impairment that we did in the last quarter that that was 1 of in the last quarter. So that was a benefit this quarter uh and 20 basis point because our third party cost was lower. So just to highlight you know our 2.6% of growth was despite the fact that our third party uh revenue and cost were lower by 60 basis points.

Speaker Change: Just 1 m in uh, you know what?

Speaker Change: Conversations with the clients, has it improved uh in terms of the business demand and you know uh are you seeing that?

Speaker Change: uh, tariff related uncertainty or the caution is now over, and they are starting to kind of, you know,

Speaker Change: On uh, Enterprise AI where we can.

Speaker Change: What is working where it's working? Especially with agents.

Salil Parekh: There's also been several things which have been done, which gives more view and focus into what's going on. And yet there is still some open items which are going on. So we see, for example, from clients, there is quite a lot of attention on cost and efficiency of their own operations, even if they're not impacted by the changes in the economy. So that is all going on, including some of the benefits that we're seeing from AI. And then finally, on a macro level, we, at this quarter, in our last deal, we've seen a lot of deals where we've benefited from clients making consolidation decisions.

Beena Parmar: Thanks Beena.

Speaker Change: Then there are Industries uh specifically Logistics uh consumer product goods manufacturing where we see the impact of the changes in the economic situations. Uh, where we were at this time last quarter. There's also been several things which have been done, which gives more View and focus into what's going on. And yet, there is still some open items which are going on. So we see, for example, from clients, uh, there is quite a lot of attention on cost and efficiency of their own operations, even if they're not impacted by the changes in the economy. So that is all going on, uh, including some of the benefits that we are seeing from, uh, Ai. And then finally, on a macro level. We at at this quarter in our large deals, we've seen a lot of deals where we've benefited from clients, making consolidation decisions.

Rishabh Shaw: The next question is from Rishabh Shaw from Money Control. Hi gentlemen, congratulations on a good set of numbers in a difficult quarter in a difficult macroeconomic environment. I have a couple of questions.

Speaker Change: Thanks Bina. The next question is from rishab Shaw from money control.

Rishabh Shaw: First on financial services, you know, two fiscals back, you had a close to 28%, now it's down to 27%. So is this a new normal, are we, is this a change in composition or are you losing market share?

Rishabh Shaw: Second, your active number has reduced in the last two fiscals and this comes on the back of revenue growth in this quarter. So is there a pricing change, what are the benefits, what's driving this?

Hi gentlemen, um congratulations on a good set of numbers and a difficult quarter and a difficult macroeconomic environment. I have a couple of questions uh first on uh Financial Services uh you know uh 2 fiscal back. You had a close to 28%. Now it's down to 27%. So uh, is this a new normal? Are we, are you is this, uh, change in composition? Or are you? Are you losing market share?

Rishabh Shaw: And also we see in the last two quarters that you have added in three-digit numbers. So is this a beginning of moving from pyramid to IP-led businesses?

Unknown Executive: Thank you.

Salil Parekh: So let me start with some of that Jayesh will add in. I think financial services we are seeing a very strong traction. So one of the things we've benefited from in financial services is, if you look at, let's say, a large 20 clients, we have in half of them, we are the AI partner of choice with those clients. In many of those clients, we see benefits from consolidation. In many of those clients, we are in the forefront, when there's regulatory change or big transformation, which includes tech and op. So in some senses, we are well positioned in financial services, we're starting to gain much more traction.

Speaker Change: Uh, second your active number of clients has reduced in the last, uh, you know, 2 fiscal. So, uh, and this comes on the back of Revenue growth in this quarter. So, uh, is there a pricing change? What are the benefits, what, uh, what's driving this? And also we see in the last 2 quarters that uh you have added uh in 3 digit numbers. So uh you know, is this a beginning of a period moving from pyramid to iPad businesses. Thank you.

Speaker Change: Uh so let me start uh with some of that Josh will add in I think Financial Services, we are seeing a very strong traction. So 1 of the things we've uh benefited from in financial services is

Salil Parekh: And we have a broad set of coverage, both in geography and in capabilities within financial services. On the active clients, you know, you always have a long take. They come for small projects, and you know, some of them eventually become larger projects, some of them, you know, eventually fall out. And after a few quarters, few months, they come back in a way. So I don't think the active client is a big matrix. Of course, it's a matrix to track.

Josh: If you look at, let's say a large, 20 clients, we, we have in half of them. We are the AI partner of choice with those clients. In many of those clients we see benefits from consolidation. In many of those clients, we are in the Forefront when there's regulatory change or big transformation which includes, uh, Tech, and op, so consensus. We, we are well, positioned in financial services. We are starting to gain much more traction and we have a broad set of coverage, uh, both in geography and in capabilities within Financial Services.

Josh: On the client. So, on the active clients, you know, you always have a long

Salil Parekh: But more important in our mind is the 100 million, you know, 50 million clients, how they grow and how the mind that one becomes once they become a sizable client. All the IPs, so they... What we are seeing is there's definitely a growth focus in what we are driving. What Jayesh mentioned earlier, we have a clear plan of recruiting people into this year, in this financial year, into the company, both from college, both laterally.

Josh: They come for a small projects and you know some of them eventually become larger projects. Some of them uh you know, eventually fall out. And after a few quarters few months, they come back in a way. So I don't think the active client is, is a big Matrix. Of course, it's a matrix to to track but more important in our mind is uh the 100 million, you know, 50 million clients, how they grow. And how the mind that 1 they can, once they become a sizable client,

Josh: on the IP, so they

Salil Parekh: But we are also seeing some of our programs, for example, what we're doing in our insurance platform, what we're doing in our insurance platform. So those are definitely areas where we see more and more IP. then we are also seeing places where for example in some of our work that we do in BPM these are not IP but they're more outcome driven and so there there's a difference between what what happens in the rest of the company which is much more headcount than outcome but we don't see that there's a huge change in that we still see that we have a plan of recruiting for this year and it's on track with us you Thank you.

Speaker Change: What we are seeing is there's definitely a, a, a growth focus in what we are driving. Uh, what JS mentioned earlier, we have a clear plan of recruiting people into this year in this financial year into the company. Both from college both Lally. But we are also seeing, uh, some of our programs. For example, what we're doing in our insurance, uh, platform. What we are doing in our financial services, banking platform, uh, in clinical, those are definitely areas where we see more and more IP

Speaker Change: then we are also seeing places where, for example, in some of our work that we do in BPM, these are not

Speaker Change: Outcome driven. And so there there's a difference between what what happens in the rest of the company, which is much more.

Speaker Change: Head, count and outcome, but we don't see that there's a huge change in that we still see that we have a plan of recruiting for this year and it's on track with that.

Jas Bardia: The next question is from Jas Bardia from Mint.

Speaker Change: Thank you. The next question is from just Bia from mint.

Jas Bardia: Good evening. I have a couple of questions. One is, has there been some sort of a revenue cannibalization, or probably a reshuffling of employees because of AI?

Speaker Change: Good evening. I have a couple of questions. Uh, 1 is, um,

Speaker Change: Has that in some sort of a revenue cannibalization or probably a reshuffling of employees because of AI.

Jas Bardia: Second is more on a macro scale. If you look at eight years of your tenure, and purely on Infosys, Infosys under you has performed better than the peers. and third consecutive year where the industry has started to slow, including Infosys. Now, considering there's been a dearth of mega deals for the company, has the company run out of steam? If so, what is it because of? Macro uncertainty, client-specific issues, or just AI engines?

second is um, more on a macro scale if you look at 8 years of your tenure and purely,

Speaker Change: um, emphasis under you has performed better than

Speaker Change: the peers.

Speaker Change: and,

Emphasis now, um, considering there's been a death of Mega deals for the company has the company run out of steam. If so what is it because of uh, macro uncertainty client specific issues or just AI in general?

Salil Parekh: Thank you, that's good to know. The large deals are working very well. So I think for us, the 3.8 billion is incredible. We have so many deals in there, one mega deal. We have deals which are focused on AI, deals which are focused on transformation, deals which are focused on consolidation. So my sense is that whole approach is in good shape. We remain, I would say, at the forefront with clients on that.

Speaker Change: So, thank you.

Speaker Change: That's good to know.

Speaker Change: The large deals are working very well. So, I think for us the 3.8 billion,

Salil Parekh: A part of where we see some of the changes is the overall economic environment and my sense is that when that is in a place where we see more and more of the AI movement which is happening well and more of other work which is digital transformation, cloud, we are seeing for example tremendous traction on enterprise applications and how they're being driven new changes. Those are the ones that will support the future, the next stages. AI itself, there's a whole piece which is around enterprise AI and productivity. But we are also seeing there are new things that we can do with enterprise AI with clients.

Speaker Change: Is incredible. Uh, we we have uh so many deals in their 1 Mega deal. We have deals which are focused on AI deals which are focused on transformation these which are focused on consolidation. So my sense is that whole approach is in, good shape, we we remain. Uh I would say the Forefront with clients on that.

Speaker Change: Uh, a part of where we see some of the changes is the overall economic environment. And my sense is that when that is in a place where we, we see more and more of the AI movement which is happening well and more of other work, which is digital transformation Cloud. Uh, we are seeing for example, tremendous traction, on Enterprise applications and how they're being driven in

Salil Parekh: For example, much deeper level of analytics, much deeper level of assessments, much deeper work on how they can optimize the business, not just for productivity, but for growth. And those will give us new revenue streams. So there is a view that we've seen from the analysis internally, where some of the addressable market in those areas is growing and quite good. So we feel quite positive that over this approach that has worked, as you described, for the last several years for Infosys, we'll continue to work for the next seven.

Speaker Change: Uh, new changes. Those are the ones that will support the, the future, the next stages, uh, AI itself. There's a whole piece which is around Enterprise, Ai and productivity where we are also, seeing there are new things that we can do with Enterprise AI with clients, for example, much deeper, level of analytics, much deeper level of Assessments, much deeper work on how they can optimize the business not just for productivity but for growth and those will give us new revenue streams. So there is a view uh that we've seen from the analysis internally where some of the addressable Market in those areas is is growing and quite good. So we feel quite positive that over.

Speaker Change: This uh approach that has worked as you described for the last several years, for Infosys will continue to work for the next several years.

Speaker Change: Thank you.

Veena Mani: and Veena Mani from the Times of India. Good evening, gentlemen. A couple of questions here. We heard reports at the end of April and through May that there were more freshers fired from the Mysore campus. Were these from the 2022 batch, if there's any merit to that? And also, does it say anything about the quality of freshers coming out of colleges in the last couple of years?

Speaker Change: The next question.

Speaker Change: We have money from from the times of India.

Speaker Change: Good and gentlemen.

Speaker Change: Uh, a couple of questions here. Um,

Speaker Change: We heard reports uh, at the end of April and, uh, through May that, uh, there were more freshers fired from the mysuit campus, uh, were these from the 2022 batch if there's any Merit to that and also does it say anything about the quality of freshers coming out of, uh, colleges, uh, in the last couple of years. Um, also the second question is,

Speaker Change: Um uh imposes move to an uh, hybrid form of interview process. Um, is that also uh uh also related to how uh uh uh how Talent is being um uh fleshed out from the market lateral and and freshers. Um, does it also have to do with the fact that because of um uh virtual interviews uh, that have been uh people who misused that format?

Veena Mani: How will that have an impact on the appraisal, on the hikes, and also the movement through maybe IJPs or also taking up projects on Accelerate and other things, if you could help me with some of these. Again, PCS, we've reported recently that there have been onboarding delays for laterals. Is that something that we see even at Infosys given that the market is not all that great?

Speaker Change: Um, now uh, TCS is uh, made its bench policy a lot more stringent, uh, by saying that people can be on the bench only up to 35 days is in forces heading there, given that the market is not, um, uh, is not all that. Uh, great. Um, also, uh, your ESG report had mentioned capability. Quotients that enforces is moving from a digital quotient to capability, quotient to. Um, uh, uh, you know, you know, to uh, uh, markets, uh, Mark, the progress of its employees, how will that uh, have an impact on the appraisal on the hikes? And also the, uh, movement, you know, through maybe igps or also taking up uh, projects on accelerate and um, other things, if you could help me with, um, some of these and um,

Speaker Change: Again we uh PCS we've uh reported recently that there have been um ongoing the onboarding delays. Um uh for laterals is that something uh uh that we see even at enforces given that the market is,

Speaker Change: Not all that great.

Unknown Executive: Thanks. There are several. I will try to get through them.

Speaker Change: Uh, thanks for the rest, several.

Salil Parekh: The first one was on the MISOR. I think there, you know, we have a rigorous process for hiring college graduates. They then go through a very focused foundational training at the campus. And then we expect that they meet assessment standards. So all of the people who join us, they get three attempts to meet those standards. After the third attempt, if they don't meet, they don't continue with the company.

Speaker Change: try to get through, uh, them, uh,

Speaker Change: On the first 1 was on the Mysore.

I think they, you know, we have a rigorous process for hiring college graduates. Uh, they then go through, uh, a very focused foundational training at the campus, uh, and then we uh uh expect that they meet.

Speaker Change: Assessment standards. So all of the people who join us, they get 3 attempts to meet those standards. Uh,

Salil Parekh: This is a process that has been in use for the last 20 years, and it's something that is sort of important because we want to make sure that the quality that we are providing to our clients is based on these internal assessment standards that we've set and that's the approach that we followed there.

Speaker Change: After the third attempt, if they don't meet, they don't continue with the company.

Speaker Change: This is a process that's been in use for the last 20 years, and it's something that is, um,

Speaker Change: sort of important because we want to make sure that the

Speaker Change: quality that we are providing to our clients is based on these internal assessment standards that we've set. And that's the approach that we followed their

Salil Parekh: Um On the bench point, I think was one of your other ones. We have no comment on the other company bench at Infosys, you know, the way we have looked at this is employees are provided opportunities for training and through learning projects, and then they are deployed onto client projects when they're ready. And that's the process we follow all through and we've been following for a long time now.

Speaker Change: um,

Speaker Change: On the bench point. I think was 1 of your other ones.

Speaker Change: Um,

Speaker Change: we have no comment on the other company bench at Infosys, you know, the way we have looked at this is employees are provided opportunities. Uh,

Salil Parekh: For more information, visit www.fema.gov Oh hybrid point of view. We want to make sure that we put in place an approach that works well for the prospective employee and for the company. And that's in part why we made some of the changes, keeping in mind, even on our employee side, we have a very flexible approach with respect to where employees are coming in. Every quarter for the last many quarters, we've seen an increase in the number of employees on campus. But overall, at a company level, we have a flexible approach, and that's sort of one of the elements of that.

Speaker Change: For training and through, uh, learning projects and then they are deployed onto Clan projects when they're ready. And that's the process we follow, uh, all through and we've been following for a long time now.

Speaker Change: um,

Speaker Change: hybrid point of view. Uh, yeah the uh,

Speaker Change: There, I think.

Speaker Change: We want to make sure that we put in place an approach that works well for the employ prospective employee and for the company. Uh, and that's in part why we've made, uh, some of the changes keeping in mind, even on our employee side, we have a very flexible approach, uh, where, uh, with

Speaker Change: With respect to where employees are coming in every quarter for the last.

Speaker Change: Many quarters. We've seen an increase in the number of employees who are on campus with overall at a company level. We have a flexible approach in that sort of 1, 1 of the elements of that.

Speaker Change: I think you report.

Unknown Executive: So on the ESG report, the digital versus the capabilities matrix that we have been using, I think, I don't think that is something that we use for the IGPs, etc. That's, that's a matrix that is important from the ESG perspective. That's where we've been. We've started publishing that, but that's not necessarily imposing on the IGPs, etc. internally.

Salil Parekh: The last question that you had was on the lateral hires. We haven't stopped any of the lateral hires or deferred any of the lateral hires.

Beena Parmar: Thank you, Beena.

Speaker Change: Yeah, so on the ESG report, uh, the digitally versus the capabilities Matrix that we have been using, I think, uh, I don't think that is something that we use for the igps, ETC. That's that's a metric. That is important from the ESG perspective. That's why we've been. We've started publishing that but that's not necessarily, uh, imposing on the is, uh, igps Etc, internally. Uh, the last question that you have, you had was on the lateral hires, uh, we haven't stopped any of the lateral has or deferred any of the lateralized.

Avik Das: The next question is from Avik Das from the Builder Standard. Hi Savil, two questions and one for Jayesh. So manufacturing seems to have really stood out in terms of the growth and you did point out that manufacturing, logistics as well as consumer package goods seem to be under stress for all the obvious reasons.

Bina Parmar: Thank you, BINA.

Speaker Change: Uh, the next question is from aik Das from the business standard

Speaker Change: Hi, sir. Will, uh

Speaker Change: Some questions and 1 for Jesh. So manufacturing seems to

Salil Parekh: Now I just wanted to understand what really worked in your favor, what is it your client specific and what really went your way and if you can also provide some outlook on North America, well the growth has been nothing compared to Europe but just wanted to get your feedback on the biggest market, how is it performing especially from the BFSI side and on the margins front, while the guidance has been narrowed, the margins still remain the same. So are you anticipating any margin constraint or pressure in going ahead? Thank you.

really stood out in terms of the growth and you did point out that manufacturing Logistics as well as consumer packaged Goods seem to be under stress, for all the obvious reasons. Now, I just wanted to understand what really worked in your favor. What is it that your client specific or what? What really went your way and, uh, if you can also provide some outlook on North America, while the growth has been nothing compared to Europe, but just wanted to get your uh, feedback on the biggest Market. How is it performing? Especially uh, from the bfsi side.

Salil Parekh: Let me start with the industry and North America. So financial North America, we see very good traction across all businesses in financial, all geographies and financial services. And then just in North America, if you look across all industries, while we have, we have shown the growth where it is, we see that market, which is the largest for Infosys in a very strong position. So yes, there are changes in the economic situation. But equally, there's good traction that we have, we have several other industries outside of logistics, or outside of consumer product, where we see good, good activity, for example, in energy utilities, for example, some of the work we're seeing in telco, and so on.

Speaker Change: And uh on the margins front uh while the guidance has been narrowed uh the margins still remain the same so are you anticipating any margin constraint or pressure? You know, going ahead. Thank you.

Speaker Change: So let me the first will also come in a little bit more on on the industry. But let me start with the industry and North America.

Speaker Change: so, uh, Financial

Jayesh Sanghrajka: So the market is quite strong. We see good traction with enterprise AI there as well. And good traction, some of the consolidation seasonality benefit. 40 basis points was one off in the Q4 last quarter and 20 basis points was lower third party. As we go forward, I think the project Maximus is still running. The proof of that was, you know, you saw last year, we delivered 50 basis point life expansion, despite multiple headwinds, we still see, you know, the project Maximus delivering on multiple counts, that will be offset by, you know, the headwinds like, you know, lower growth, we are now talking about one to 3% growth.

Speaker Change: North America. We see very good traction across all businesses in financial uh all geographies and financial services. And then just in North America, if you look across all Industries while we we have, we have shown the growth where, where it is, we see that market, which is the largest for Infosys in a very strong position. So yes, there are changes in the economic situation, but equally there's good traction that we have. We have several other Industries outside of logistics. So I outside of consumer product uh where we see good good activity. Uh, for example in uh, energy utilities. Uh, for example, some of the work we're seeing in, uh, Telco and so on, so the the market is quite strong, uh, we see good traction with the Enterprise AI there as well, uh, and good traction. Uh, some of the consolidation, uh, wins that we have seen on the large deals have come.

Jayesh Sanghrajka: So the fixed cost will play out. The fixed cost to the growth areas will play out. The compensation related things will play out because now we'll have a full, a full year impact on the compensation, etc. Some of the large deals will start ramping up and there'll be transition effort, etc., where we incur cost, but we do not get revenue in the first few months or weeks when the transition happens. So all of that will be the puts and takes. We still aspire to increase margins from where we are.

Speaker Change: Of 20 pages per month declined, this quarter, uh, you know, 100 basis points was on account of comp and variable pay. Um, 30 basis points was currency 20, basis points was on account of investment with that, we made in sales. Um, that was offset by, uh, you know, the, uh, the benefits that we got from Maximus, 70 basis points because of the pricing increase and the seasonality benefit. 40 basis points was 1 off in the queue Q4 last quarter. And uh, 20 basis points was uh, lower third party as we go forward. I think the project maximum is still running, the proof of that was uh, you know, you saw last year, we delivered 50 pages per expansion despite multiple headwinds. We still see, uh, you know, the, the project maximum is delivering or multiple counts, uh, that will be offset by, you know, the headwinds like, uh, you know, lower growth. We, we are now talking about 1 to 3% growth. So the fixed cost, uh, will play out the fixed cost of the growth areas will play out, uh, the uh, compensation related things will will play out because now, we have a full full year impact on the compensation Etc. Some of the large deals will

Speaker Change: Start ramping up and they'll be transition, uh, effort, Etc, where we incur cost. But we do not get Revenue in the first few, uh, months or weeks when the transition happens. So all of that will be the puts and takes, uh, we still aspire to uh, increase margins, uh, from where we are.

Sanjana: The next question is from Sanjana from the Hindu Business Line. Good evening, gentlemen.

Speaker Change: Thank you. The next question is from sanjana from the Hindu business line.

Sanjana: Do you see any change in projects, you know, either ramping up or ramping down due to the geopolitical uncertainties or any reassessment on the client's end? And also, do you think that in FY26, third party costs and revenues will be lower than in FY25? Because I think it contributed to a significant decline, at least in the last fiscal or last quarter.

Sanjana: And coming to hiring, I can see that the headcount has increased marginally between Q4 and Q1 this year. So do you at all see any impact of AI and automation on hiring? Yeah, just these. Thank you.

Salil Parekh: So on the first one, I think we see the changes in the economic outlook with all of the changes going on in US and Europe. We have not seen any change in a specific client or a specific project situation. It's more overall what we were sharing earlier. First, there's more emphasis on cost and efficiency across. There is some impact at an industry level, if you look at logistics or consumer products or some parts of manufacturing like auto, and then we see a lot of benefits that we are seeing also, because in this, like a cost or consolidation discussion, we quite a bit when clients have made some of those decisions.

Speaker Change: The ramping up or ramping down due to the geopolitical UN uncertainties or any reassessment on the client's end. And also, uh, do you think that fee 26? Uh, in Phi 26 third, party cost revenues will be lower than in fi25, because I think there was a it contributed to a significant decline at least, uh, in the last fiscal or last quarter um, and uh, coming to hiring, I can see that. Uh, the headcount has increased marginally between Q4 and q1 this year. Uh, so uh, do you at all see any impact of AI and automation on hiring? Uh, yeah, just please. Thank you.

Speaker Change: So on the first 1, I think uh we see the changes in the economic Outlook with all of the changes going on uh in US and Europe. Uh We've not seen any change in uh a specific client or a specific uh project situation. It's more overall. What what we were sharing earlier first? Uh, there's more emphasis on cost and efficiency across, there is some impact at an industry level. If you look at Logistics or consumer products or some parts of manufacturing, like Auto, uh, and then we see a lot of benefits.

Speaker Change: that we are seeing also because in this uh like a cost or consolidation discussion, we

Salil Parekh: So there, we're okay, overall, from the perspective, which is partially what's helped us with the growth.

Quite a bit when clients have made some of those decisions. So so there, uh, we're okay. Uh, overall from the perspective which is partially, what's helped us with the growth

Salil Parekh: I think on the hiring, recruiting and people, so we first have a plan for recruitment for this year for college and latchers. We see with AI that there has been benefits that we see in terms of productivity. We see with AI, especially enterprise AI, that there is more things that we're doing with clients because Even things like the cloud transitions get accelerated, or data and analytics foundations get accelerated. And those programs are fundamental to making enterprise AI successful with clients. So those things give us more newer work. And on balance, we see that overall, that continues to be supporting our growth activity now, plus the consolidation side of the cost efficiency side.

Speaker Change: I think on the uh hiring recruiting and people uh so we we first have a

Speaker Change: a, a plan for recruitment for this year for college, uh, and uh, later

uh, we see with AI that there has been uh, benefits that we see in terms of productivity,

Speaker Change: We?

Speaker Change: with AI, especially Enterprise AI that there is more things that we are doing with clients because for

Salil Parekh: So we will continue with a hiring plan for this.

Speaker Change: Even things like the cloud transitions get accelerated or data analytics foundations, get accelerated and those programs are fundamental to making Enterprise AI successful with clients so those things give us more newer work. And on balance, we see that overall uh, that that that continues to be uh uh supporting uh our growth activity now, plus the consolidation side of the cost efficiency side. So we will continue with our hiring plan for this year.

Ayanti Bera: The next question is from Ayanti Bera from the Financial Express. Hello. Hi. I don't know if this has been talked about already.

Speaker Change: Thank you. The next question is from ayanti ba from the financial Express.

Jayesh Sanghrajka: give us the underlying reasons that encourage you to increase the lower end of your revenue growth guidance. Yes, if you look at last guidance, we had clearly called out that at the lower end of our guidance, we are expecting higher heightened uncertainty right in the environment. And at the upper end of the guidance, we are expecting steady to marginally improving environment. One point gone by, we have a strong deal with. That is the reason why we have increased our lower end from zero to one percent. At the same time, on the upper end, we still see possible uncertainty on the back of tariff and on the whole of macro environment.

Reasons that encouraged you to increase the lower end of your Revenue growth guidance.

Speaker Change: yes, so if you look at, uh, last

Speaker Change: Guidance, we had clearly called out that at the lower end of our guidance, we are expecting higher heightened uncertainty, right? In the environment. And at the upper end of the guidance, we are expecting uh, state to marginally improving environment.

Speaker Change: 1.

Speaker Change: gone by we

Speaker Change: Water. We have a strong, uh, deal with

Jayesh Sanghrajka: But at the lower end, you know, that the quarter end, the quarter performance and the deal that we have won gives us better confidence at this point.

Unknown Executive: For a list of image attributions, visit our website at www.nptel.com Thank you.

Speaker Change: We still see possible uncertainty um, on the back of tariff and on the whole of micro environment, but at the lower end, uh you know, that the quadrant the quarter performance and the deals that we have 1 gives us better confidence at this point.

Unknown Executive: With that, we come to the end of this press conference. We thank our friends from media for being here today.

Unknown Executive: Thank you, Salil, and thank you, Jayesh. Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website and on our YouTube channel later today.

Unknown Executive: Thank you, and please join us for some high tea outside.

Speaker Change: Thank you with that. We come to the end of this press conference. We thank our friends from media for being here today. Thank you, Sal, and thank you J. Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website, and on our YouTube channel later today. Thank you. And, please join us for some it outside.