Infosys Q3 Profit Dips 2%: Headline Weakness Is a Labour-Code Charge—The Underlying Story Is Deal Wins + Raised Guidance

reported a ~2% YoY decline in Q3 FY26 net profit to about ₹6,654 crore, largely due to an exceptional expense linked to India’s new labour codes. ​ Despite the profit dip, revenue grew ~8.9% YoY to ₹45,479 crore and the company raised FY26 constant-currency revenue growth guidance to 3%–3.5% (from 2%–3%), suggesting improving demand visibility. What really hit profitability Reports attribute the PAT decline to a ₹1,289 crore labour code-related exceptional item, which also contributed to a sharp contraction in reported operating margin to 18.4% (from 21.3% YoY). ​ On an adjusted basis, operating margin was cited around ~21.2%, implying core operating performance was more stable than the reported margin headline. ​ The bullish counter-signal Infosys called out strong large-deal momentum (reported at $4.8 billion in large deal wins) and robust free cash flow generation (reported at $915 million; adjusted $965 million). ​ That combination—raised guidance + strong deal wins—makes this quarter look more like an accounting-reset event than a demand shock. ​ Source: The Hindu No Recommendation