We will help NHS leverage AI to streamline operations and improve patient care for UK citizens. We've deepened our Topaz AI capability with an agent services suite called Topaz Fabric. This suite helps our clients manage and implement AI agents across the enterprise. We had strong momentum in AI adoption across our client base. Today, we work with 90% of our largest 200 clients to unlock value with AI. We're currently working on 4600 AI projects. Our teams have generated over 28 million lines of code using AI. We've built over 500 agents. We're scaling our forward deployed engineer team. We are now witnessing six AIEL value pools emerging that could unlock a large incremental opportunity. We also see productivity-led benefits that compress some legacy areas. The six large AIEL value pools are AI engineering services, data for AI, agents for operations, AI software development and legacy modernization, AI deployed in physical devices and AI trust and risk services. We believe we are uniquely positioned to capture market share across these value pools and emerge as the leading AI value creator for global enterprises. We will share a comprehensive view of our approach at an investor day later this quarter. With a strong performance in this quarter, we have revised our revenue growth guidance for the financial year. The new revenue growth guidance for this financial year is 3% to 3.5% growth in constant currency. Our operating margin guidance for the financial year remains the same at 20 to 22%. With that, let's open it up for questions.
Thank you Salil. We will now open the floor for questions. Joining Salil is Mr. Jeska, Chief Financial Officer, Infosys. The first question is from Ritu Singh from CNBC TV18.
Hi, thank you and sorry, this is our only chance to speak with the management every quarter so we'll have to exceed that one question limit. With that, Salil and Jes, to begin with I wanted to start with your headcount number. We've seen an increase of 13 to 46 over just the last two quarters and this is interesting because it's coming at a time when your peer TCS is cutting 30,000 jobs. How should we read into this? Is this a real indicator of how you see the demand environment improving? And with that I wanted to get to your guidance figure being raised to 3 to 3.5%. How much of that upgrade is because of large deals like NHS being factored in? How much of the Versant acquisition which is yet to be completed is baked into that number? Last quarter you were telling us there are segments like retail that remain the weakest link. So where are you seeing improvement that has led you to upgrade your guidance? Also sequentially we've seen a marginal dip in your margins to 20.8%. This is at a time when there are tailwinds emerging from the rupee appreciation. So if you could break down why that has been the case, and while you continue to tell us about how you're uniquely placed to exploit that AI opportunity, and the likes of HLTech and TCS have been giving us concrete numbers, why does Infosys refrain from doing so? Thank you.
So let me start. I think on margin Jes might have some points. The first part I missed a little bit. It was the headcount increase, right?
Yeah. So on the headcount increase, I think it demonstrates that we have confidence in where the market is, what we are seeing in terms of the demand, and that also feeds into the second point you had in terms of how we are raising the growth guidance. First, in terms of the growth guidance, we are just finishing the third quarter, so only one quarter is left. We have had a lot of large deals in the previous few quarters plus we had a very strong execution in this quarter. We have also seen, you asked a little bit about the industries. We've seen for example in financial services and we've seen in energy, utilities, resources services, we see that the way the deals have come, the way we have become AI partner of choice with our largest clients, we see a good outlook even as we look into the next financial year and that's in part helped us to increase the guidance which is only for this financial year ending in March. On margin, you want to...
Yeah, so just first of all, very happy new year to all of you. Before I come to margin, I just wanted to also touch upon the headcount part. If you recollect, last year we had called out that we are going to hire 20,000 freshers this year, and we have onboarded roughly around 18,000 freshers and we are well on our way to finish our 20,000 number for this year, which in a way reflects in our headcount also because many of them are under training. If you look at our utilization including trainee, it has come down, so that is our investment into building capacity for future. On margins, we have expanded our margins this quarter by 20 basis points versus the last quarter. We are now on a 9-month basis at 21% margin which is midpoint of the guidance that we have given. The puts and takes of 20 basis point expansion this quarter: 40 basis points came from currency, 50 basis points came from the project Maximus mainly on account of value based selling and the lean and automation that we have done on multiple projects, offset by the furloughs and working day that we had. We also accrued a higher variable pay compared to last quarter which was offset by some of the one-offs that we got. So that's the broad margin work. But if you look at a 9 months period margin which is 21%, we have invested in our sales and marketing which has gone up by 50 basis points on a year-on-year basis, so that has been absorbed in the margin. The lower utilization of almost 1% has been absorbed in our margin. So this margin is after absorbing all of that where on one side we are building capacity for future, on the other side we are investing in sales and marketing and we still had a stable margin for that.
Do you have an outlook for next year now that you're completing this 20,000 for the year? You've had a lower attrition as well this quarter.
We will have an outlook once we give our guidance for next year in April.
And also the wage hikes, what's planned for the year and what kind of impact that could have on the margins from here on.
So we just finished one cycle of our wage which was in two parts in January and April. We haven't yet decided on the next part yet. We will decide on that as we progress.
Yeah. On AI, I think one of the points I shared, we have a lot of that information was with our largest 200 clients, over 90% of them we are doing AI work. What we are doing in AI is unique AI services with clients and also we've reshaped all of our existing services leveraging AI. For example, we are using agents in several of our service lines to help enhance either growth or productivity. So that's what we are sharing in terms of what our impact is.
Thank you Ritu. The next question is from Mani Davi from ET.
Good afternoon Salil and Jes. This is Mani Davi from 18 Now. My question is on demand visibility, tech spending and AI adoption. Looking at the constant currency growth scenarios and commentary around fewer billing days and deal timing, how are clients thinking about calendar year 2026 tech spending, especially discretionary versus transformational programs, and at the same time pace of enterprise AI adoption as well as tech spending outlook are amongst the key monitorables we are looking towards. How does the scenario look like and how are the pricing models evolving according to you?
I'll start with that, maybe a little bit on the pricing. Jes might have some views on the demand. We see good demand outlook in the sense of we have had strong large deals. Our large deals pipeline remains healthy and we are seeing in the two industries that I mentioned, financial services and energy, resources, utility services, a way that our work on AI is going and the way the deals have shaped up, we see a good outlook as we look even beyond this financial year into the next financial year. On financial services specifically, we see discretionary spend and good traction in what we are seeing across the market. Having said that, overall we want to still see all of the other industries and segments start to show that, but these two are definitely something that we are seeing today.
Yeah. And on the pricing, I think as newer and newer technology evolves, every time there's a change like that you see a new pricing model evolving as well. We are seeing multiple new pricing models evolving. Some of them are being led by us, whether it is outcome based pricing or whether it is pricing which is specific to agents etc. So it's a little early in my mind in terms of calling out specifically what are the pricing models going to evolve on this, but everybody is testing new pricing models at this point in time.
Thank you. The next question is from Srishti Achar from the Economic Times.
Hi, happy new year to all of you. So couple of quick questions. One, I wanted to know in the sharp decline in operating margins that we're seeing, if the impact is beyond the labor code charges that the company has taken. I also wanted to know in terms of there's also been a sequential decline in your top contribution revenue contribution from your top five and top 10 clients. So can you give us a sense of why that is happening and what the next couple quarters look like on that. The third, I also wanted to know in terms of the whole H-1B row that is going on. This morning also we saw some claims of employees being on the same as well. So I wanted to just know what is going on on that.
