The emphasis numbers are out and we've been waiting to see how the company has done. Remma is here. Remma, take us through what you're getting right now on top of things.
Well, I'm actually waiting for the numbers. I can't see it right now on the screen. What I do know is that the revenue guidance stands at 1.5 to 3.5%. This is closer to the lower end of the comp. I mean this is largely in line with expectations. The street expectations were for 1.5 to 4.5%. The company has guided for 1.5 to 3.5%. Had the company delivered closer to 4.5% I think it would have come as a bit of a positive surprise. 1.5 to 3.5% is largely in line with what had to guide which is 1 to 4%. So the guidance doesn't have a positive surprise. So that's the one number that we have right now. Margin guidance was likely to remain unchanged at 20 to 22%. But I think you know as of now I'm just awaiting the numbers. If we could get them flashed on the screen it would be helpful but the expectations were not very high in any way the Q4 numbers are in the back seat.
Absolutely. Right. What you are looking forward was for FY27 guidance especially because HCL came out with a very weak set of numbers. Remember HCL was down 10% because of its muted guidance. So in that context I think Infy's numbers are in line.
But there is no positive surprise. I think the street would have wanted for a hint of positive surprise because the company's deal wins were strong.
So they would have hoped that maybe the company would have been able to push higher. That said, let me caveat it by saying that generally Infosys is a conservative guide is a conservative company and they don't usually guide very high in Q1 because Q1 it's just the beginning of the year. You want to wait to see how the quarter plays out and the rate at which AI has been, you know, AI is just getting more powerful every single month.
Absolutely. We saw all of the IT stocks that got pummeled in trade because of this demand worry this AI worry but you know versus the other companies we saw Tech Mahindra inline set doing better the street feared much worse but their deal wins were quite steady right.
Yes. But just if someone could tell me, are the numbers out?
There seem to be no numbers flashing on the screen at this point in time. So we're still awaiting those numbers on Infosys. But you know, Remma was taking us through those expectations. If you could run us through just the top topline numbers that we're expecting from Infosys right now.
Well, we were expecting about a 2% revenue decline in dollar terms. In constant currency terms, it was expected to be a decline of about a half a percent. Now remember INFI gives you a guidance for the full year they're working with three to three and a half%. We have the 9-month numbers in so in a nutshell you know what to expect in Q4 right for the company to meet the full year guidance they need to do a minus 2 to 0% growth in Q4. So the expectation was that it would be a slightly subdued quarter margins for the company are likely to inch up on a quarter-on quarter basis because of the project maximus. There are rupee depreciation benefits. Okay we finally got one number and that's the bottom line. 851 is the company's bottom line and that is higher than consensus expectations. Revenue growth though has come bang in line with street expectations at 46,42. So these are the only two numbers that we have. The company's rupee revenue growth has come at 2% quarter-on quarter in line with expectations while the bottom line growth has gone up 28% at 8501 and there is a significant beat that you can see on the company's bottom line but remember in the prior quarter the bottom line was impacted on account of the labor cost impact which is why quarter-on quarter you are seeing a big jump in the company's profitability profits have gone up by nearly 28%. As I said the key is going to be the guidance. So we'll await some more let the numbers actually get flashed. You know the guidance that we're flashing is what someone had sent me but we don't have it officially yet from the company. So okay we have SEP joining in while we await. Okay we've got the number as well EBIT number 9743. 9743 is the EBIT performance and this would imply the company's margins at 21%. So there is a minor expansion of 20 basis points 21 versus 20.8%. But it's not a big expansion. SAP I remember when TCS came out with the numbers and there was just a 10 basis point margin expansion. The revenue number for TCS was actually pretty good at 1.2%. But the street reaction was negative because they were like well you got so much by rupee depreciation but it's not showing up in your margins. Now even in the case of Infosys we can see a margin expansion of 10 20 basis points 21%. My consensus expectation was 21.3%. How would you read that?
No, no, you know this is a fact if you see go in past and also see the when the slide happens or when the depreciation happens you don't get immediately benefit out of it because there are lot of complications which are involved and multiple currencies are involved but over a period of time you get the benefit so I would not read 20 basis point here and there because the expectation I think was also 21 and a half or 21.4% so broadly you know it is there so I don't foresee much negativity there we need to see what is the growth number and what is the guidance number I think from growth expectation if anything beyond 3 4% is there for FY27 it will be in decently because you know the expectation just 45 50 days back was that you know there will be negative growth for the first time so I think versus that people will measure it and I have not seen the deal win numbers yet But based on what you are commenting seems to be fine.
Okay. No, we still don't have the numbers. What we know is the dollar revenue growth and that has come down by 1.1%. Which is again slightly worse than the street expectation. The street expectation was for about a minus 2% dollar revenue growth. Okay. Constant currency revenue growth has come in at minus 1.3% on a quarter-on quarter basis. Sep this is lower, right? I was working with a half a percent decline. So minus 1.3% is a miss.
Some people have minus 8 and this is showing minus 1.3. So there will be 50 basis point here and there. The big thing is what is the deal? What is the TCV that is very important data in my view and if that data is good then I think rest of the things people will not see. Must remember that you know there is lot of uncertainty in the highest uncertainty due to AI was in this current quarter and previous quarter only. So I don't know how much it will matter. Most important thing will be the commentary of the management in my mind.
Well the management is actually ready at the press conference while we await the numbers. So can we cut across to Salil Parekh CEO and MD? Okay let's cut across. Sep we'll connect with you.
So was the previous year we shared our AI strategy during the AI investor day a few weeks ago. We see a large addressable market for AI services across the six areas that we mentioned. AI strategy engineering, data process, legacy modernization, physical AI and trust. With our Topaz fabric platform for AI and our Cobalt platform for cloud, we have differentiated capabilities. Their capabilities that are operational today and that are working with our clients across each of these six areas of the AI landscape. As we look ahead to the financial year 2027, we see large opportunities in AI services. We also see continued competitive intensity and we see an AI productivity impact. A combination of these things with a clear AI strategic roadmap and a real-world toolkit of Topaz fabric. We are well positioned to support a client's transformation technology and operations objectives. Our revenue growth guidance for the financial year 2027 is 1.5% to 3.5% growth year on year in constant currency terms. We expect acceleration of growth in financial services and in energy utility resources and services vertical. Our operating margin guidance for financial year 27 is 20% to 22%. With that let's open it up for questions.
Thank you Salil. Joining Salil is Mr. Jesh Sangraka Chief Financial Officer Infosys. The first question is from Ritu Singh from CNBC TV18.
Hi Salil. Hi Jesh. Salil first on your guidance itself 1 and a half to 3 and a half%. If you could break up for us there are a bunch of acquisitions you've made at the end of the quarter. By when do you expect them to close? You know will it be sometime during the course of FY and if yes how much of that is baked into these numbers and especially on the discretionary spend environment because we've heard from your peers like HCL Tech for instance talking about how there were two large US telecom clients that had cut down on spends there were cancellations of two SAP projects and so on Wipro again giving a similar you know sort of commentary so what are you seeing from your clients and some of the verticals you had highlighted the last time that were seeing weakness you know what sort of guidance you have there. Secondly on your margin 21%, if you could break up for us you know how much was the tailwind from currency etc. What portion have you reinvested? You know what the philosophy there is? And Jesh 20,000 was the figure you gave us for hiring for the last fiscal what's the plan for this year? What are the wage hikes that you've you know planned and the time period for that? And Salil if I may, you know, there's been some speculation about your tenure here at Infosys. Your current term ends in March next year. Has there been a discussion at the board level about a potential extension? And you know, would you wish to continue for a full term? What's been the talks around that?
So, let me start with the industry view on the guidance of the revenue. Jesh will give a little bit of the color with that acquisition what you mentioned what the way we have made the guidance and some other market outlook. So what we are seeing right now is financial services we are seeing an acceleration of our growth next year. So we had growth in financial year 26 we seeing more growth in energy utilities services resources vertical similar good more growth there what we are seeing in terms of projects we see that at the AI investor day we shared that our AI services revenue was growing nicely we see on the large deals the net new is pretty large for the full year at 55% so that gives us support for growth and we see the compression that we mentioned in that AI investor day and earlier just now as a combination we are not seeing something that has unusually changed from that last quarter to this quarter in the sense these are the scenarios we were seeing it's not either become more or less it's that sort of a scenario good growth on those industries I mentioned good growth both in the AI and compression and there's competitive intensity and all that put together with a little bit of like a color on the acquisition is where the guidance comes out and then on margin also Jesh will give some view and on the you know on AI for instance you told us in your investor briefing that 5 and a half% of the revenue in the third quarter came in from AI the total addressable market is about 300 to 400 billion. You know in the fourth quarter is there a number you could provide us annualized what is the number you see if there's more clarity you could give us and or what market share do you target from this 400 billion figure? So we are targeting a very good market share from that number which was for 2030 what we had given the addressable market from an external study. The growth in AI services is very strong but we have not disclosed that revenue number externally.
5 and a half% is that yeah.
No it's growing is it's much much more growth in the for but we're not giving the number but it's growing very nicely.
