1. Opening Hook
Just when everyone thought the “AI transformation” meme had peaked, Infosys said — “hold my neural net.” 🤖Q2FY26 brought a heady mix of buzzwords, buybacks, and British contracts. Revenue rose modestly, but the $1.6 bn NHS mega deal gave everyone in Bengaluru a reason to sip masala chai with pride.Yet, behind all the AI talk and margin flexing, investors heard the same hymn:“macro uncertainty continues.”Classic IT chorus. Stick around — it gets juicier when attrition, H-1B drama, and “forward-deployed engineers” enter the stage.
2. At a Glance
- Revenue up 2.9% YoY– Management calls it “strong”; Excel calls it “meh.”
- Sequential growth 2.2%– Small lift, mostly from pricing, not volumes.
- Operating Margin 21%– Expanded 20 bps; Project Maximus doing max kaam, minimal drama.
- Large deals $3.1 bn (67% net new)– CFOs of client firms clearly want “AI cost savings.”
- Free Cash Flow $1.1 bn (131% of PAT)– Tax refunds working harder than freshers.
- Headcount +8,000– Because ChatGPT still can’t code Infosys invoices.
- Attrition 14.3%– Slightly higher YoY; apparently, “AI awareness” didn’t keep everyone loyal.
- Stockholders get ₹23 interim dividend– 9.5% bump; enough to buy one chai and two biscuits.
3. Management’s Key Commentary
Salil Parekh:“Revenues grew 2.9% YoY, margins at 21%. Large deals at $3.1 bn.”(Translation: Growth is slow, but we’ll throw some AI glitter on it so it shines.)
Jayesh Sanghrajka:“Volumes soft, growth driven by realization increase.”(Translation: We billed more for doing slightly less. True Indian efficiency.)
Salil Parekh:“We changed guidance from 1–3% to 2–3%.”(Translation: The lower end needed a self-esteem boost.)
Jayesh Sanghrajka:“Despite uncertainty, we tightened guidance.”(Translation: We’re confident, but only just enough to not get sued.)
Satish H.C.:“We are the industry-leading enterprise AI provider with 2,500 AI projects.”(Translation: Every project with an Excel macro now qualifies as ‘AI’ 😏)
Salil Parekh:“Majority of US workforce doesn’t require H-1B visas.”(Translation: Thankfully, Indians already settled in Texas.)
Jayesh Sanghrajka:“Project Maximus delivered 30 bps margin gain.”(Translation: Someone’s finally using that Six Sigma certification.)
Salil Parekh:“Our $1.6 bn NHS deal integrates AI transformation.”(Translation: UK taxpayers will soon be debugging Infosys dashboards.)
4. Numbers Decoded
| Metric | Q2 FY26 | YoY Change | One-Line Analysis |
|---|---|---|---|
| Revenue (USD) | $5.0 bn | +2.9% | “Slow clap” growth in a hyped AI market. |
| Operating Margin | 21.0% | -10 bps | Project Maximus saved the day (barely). |
| Net Profit Margin | 17.6% EPS ₹ | +13% YoY | EPS up, but narrative still on repeat. |
| Free Cash Flow | $1.1 bn | +20% | Tax refunds = CFO’s new best friend. |
| Large Deal TCV | $3.1 bn | +6% QoQ | 67% net new — consolidation party! |
| Headcount | 332,000 | +8,000 QoQ | Because AI still needs human babysitters. |
| Attrition | 14.3% | +0.3% YoY | Exit interviews powered by ChatGPT soon. |
| Cash & Investments | $6.2 bn | Flat | Waiting for buyback to flex that pile. |
| Buyback | ₹18,000 cr @ ₹1,800 | — | “AI for shareholder value.” Literally. |
Margins steady, cash robust, but topline feels allergic to acceleration.
5. Analyst Questions
BNP Paribas:“Will AI modernization drive future work?”→Salil:“Absolutely.”(Translation: If it moves, we’ll label it AI.)
TD Cowen:“Small deals trend?”→Salil:“Unchanged.”(Translation: The same clients, smaller invoices.)
Guggenheim:“Subcontractor usage up — why?”→Jayesh:“Bridging skill gaps.”(Translation: Our bench is watching YouTube tutorials.)
Nuvama:“Visa costs — problem or blessing?”→Jayesh:“More offshoring could improve margins.”(Translation: U.S. won’t notice if jobs move to Mysore.)
CLSA:“AI deflation or growth driver?”→Salil:“Too early to say.”(Translation: Ask me after another quarter of buzzwords.)
6. Guidance & Outlook
Infosys now guides FY26 revenue growth at2–3% CC, up from 1–3%. Margins
