American Noble Gas Q1 25/26 (Media) Earnings Call Transcript

Quartr
Provided by Quartr
July 23, 2025

Key Takeaways

  • Positive Sentiment: Infosys reported 2.6% sequential and 3.8% year-on-year constant-currency revenue growth in Q1, driven by strong performance across its top five industry verticals and major geographies.
  • Positive Sentiment: The company emphasized leadership in enterprise AI, deploying 300 AI agents that help clients accelerate decision-making, improve customer experience, and boost operational efficiency.
  • Neutral Sentiment: FY26 revenue guidance was revised upward to a range of 1%–3% constant-currency growth, with margin guidance unchanged at 20%–22%, reflecting both confidence in demand and ongoing macro uncertainties.
  • Negative Sentiment: Q1 margins declined by 20 basis points amid wage hikes and currency headwinds, partially offset by pricing gains, cost efficiencies from acquisitions, and Project Maxima initiatives.
  • Neutral Sentiment: Inorganic acquisitions contributed ~40 basis points to Q1 growth, indicating that the bulk of the 2.6% constant-currency revenue increase was delivered organically.
AI Generated. May Contain Errors.
Earnings Conference Call
American Noble Gas Q1 25/26 (Media)
00:00 / 00:00

Transcript Sections

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Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

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. As always, we request one question from each media house so that we can accommodate all of you over the next forty five minutes or so. With that, let me invite our Chief Executive Officer, Mr. Salil Parikh for his opening remarks. Over to you, Salil.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Our large deals were at $3,800,000,000. The main drivers of our growth were the leadership in enterprise AI and a continued success in clients selecting us for consolidations. We are seeing good demand for AI agents. We have built 300 agents across business, operations and IT areas, and they are 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 Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Based on our performance in Q1 and our current outlook, our 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.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you, Salil. We will now open the floor for questions. Joining Salil is Mr. Jaish Shangarajkar, Chief Financial Officer, Infosys. The first question is from Ritu Singh from CNBC TV18.

Ritu Singh
Deputy Editor at CNBC-TV18

Hi, gentlemen. Thanks very much for the question. 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 had factored in.

Ritu Singh
Deputy Editor at CNBC-TV18

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% to 3%? And how much of this upward revision that we're seeing and including the kind of constant currency growth, 2.6% in this quarter, has come from your inorganic from your acquisitions that you've made? That's one part of the question.

Ritu Singh
Deputy Editor at CNBC-TV18

Also, how would you guide The Street to look at these numbers? Would you really say this is a turnaround that you're seeing in the current macro environment that going ahead, this kind of performance would be sustained? And a word, last time, we didn't hear much from you on the whole tariff conundrum and how that is impacting discretionary spend, specifically in sectors like manufacturing, retail. What's your sense on the clients? And if you could also add a word on your hiring plans for the year. Thanks very much.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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. 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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, US going through changes. So keeping that in mind, we've narrowed the guidance and increased the lower end.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

On the inorganic part, I'll I'll let Jaish mention how much of it is inorganic.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

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 number.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Then back on the 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, that has given us some of the positive growth that we've seen in this quarter. So there on the acquisition as Jay shared, it's a small part of it even if you keep that aside, we are well over 2%, 2.2 terms of constant currency growth in the quarter.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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' 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 in the way that we see it.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

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 it you know, we expect to continue hiring in line with what we've announced at the beginning of the year. We there's no change there.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you, Ritu. The next question is from Haripriya Suresh from Reuters News.

Haripriya Suresh
India Company News Correspondent at Reuters

Good evening, gentlemen. One quick, I wanted to understand, America has not growth has been sort of flattish, but Europe has grown really well. Just some color on the specific markets. Is Europe client specific? What is happening on that end? And 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 utilization is 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? And I wanted to get some color on what the wage hike scenario will be for this quarter as well. Thank you.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

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 bps came from the acquisition and the balance came from the volume increases, which we've been able to manage within our current headcount through utilization. Now that we are at a peak, any further volume increase will need to be we do need to come from the hiring, right?

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

So that's where we are. In terms of U. S. 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 few years back in Europe.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

We had identified Europe as a geography to invest into. And all of that, I think, is working well across sectors. Sorry.

Haripriya Suresh
India Company News Correspondent at Reuters

Do you think that geographical mix changed between America and all?

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

Because Europe is growing faster versus America to that extent it's changing, but still US remains the largest sector for us, largest geography for us. Sorry, you had a third question. Yeah, we did a wage hike already, first wage hike, I mean first part was that effective January, the second part is already rolled out effective April. First, 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. Having done the wage hike very recently, you know, next year next one, we'll have to decide when.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you, Priya. Next question is from Bina Paramar from The Economic Times.

Beena Parmar
Assistant Editor at The Economic Times

Hi, Salil. You mentioned about, you know, 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're passing on to your customers?

Beena Parmar
Assistant Editor at The Economic Times

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? What were the factors that led to the margins? Because I think it has declined. So could you

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Let address 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. Typically, all productivity benefits, a part of that is shared with clients and a part of that is shared with us. We see, if you look at the overall level, what Jayesh was sharing, we have seen our productivity of our revenue, way our own pricing is working, at a macro level improving.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

And this is more because we are doing work which is creating more impact. In addition to the productivity which is making some of that benefit being shared with clients. So these are two different factors, but on balance, we see an into the quality of the revenue that we are seeing now.

Beena Parmar
Assistant Editor at The Economic Times

So what kind of productivity gains you've been passing on?

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So there, we are not discussing the amounts we are passing on. But in terms of what we're seeing as a benefit, we are seeing between 515% through AI programs where we are working with clients where typically there are disparate systems. Internally, are some things we've done which are slightly higher than that, but those are on internal like if you look at our finical product, it's one uniform sort of a code base in which we can get better productivity.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

On the margin work, if you the 20 basis points of decline, the puts and takes of that, 100 basis points of headwind came from compensation related factors hike that we gave in April as well as the higher variable pay that we pay to our employees or will pay to our employees for this quarter. 30 basis points was a headwind on account of currency and 20 basis points for other factors. 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.

Beena Parmar
Assistant Editor at The Economic Times

Just one question, what conversations with the clients, has it improved in terms of the business demand? And are you seeing that tariff related uncertainty or the caution is now over and they are starting to kind of

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So on a macro basis, what we see is there are clients all clients are quite focused on enterprise AI where we can 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, 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

And then finally on a macro level, at this quarter in our large deals, we've seen a lot of deals where we benefited from clients making consolidation decisions.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thanks Bina. The next question is from Rishab Shah from Money Control.

Reshab Shaw
Senior Correspondent at moneycontrol

Hi gentlemen, congratulations on a good set of numbers in a difficult quarter, in a difficult macroeconomic environment. I have a couple of questions, first on financial services, Two fiscals back, you had close to 28%. Now it's down to 27%. So is this a new normal? Are you is this a change in composition?

Reshab Shaw
Senior Correspondent at moneycontrol

Or are you losing market share? Second, your active number of clients has reduced in the last two fiscals. So and this comes on the back of revenue growth in this quarter. So is there a pricing change? What are the benefits?

Reshab Shaw
Senior Correspondent at moneycontrol

What's driving this? And also, we've seen 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? Thank you.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So let me start with some of that, Jaish 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 senses we are well positioned in financial services, we are starting to gain much more traction and we have a broad set of coverage both in geography and in capabilities within financial services.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

On the active clients, you always have a long take. They come for small projects and some of them eventually become larger projects, some of them 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, but more important in our mind is the 100,000,000, you know, 50,000,000 clients, how they grow and how they mine that one become once they become a sizable client.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

On the IP, so there what we are seeing is there's definitely a a 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. But we're also seeing some of our programs, for example, what we're doing in our insurance platform, what we're doing in our financial services banking platform in Finacle. 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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 that.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you. The next question is from Jas Bardia from Mint.

Jas Bardia
Senior Correspondent at Mint

Good evening. I have a couple of questions. One is, has there been some sort of revenue cannibalization or probably reshuffling of employees because of AI? Second is more on a macro scale. If we look at eight years of your tenure and purely your emphasis under you has performed better than the peers.

Jas Bardia
Senior Correspondent at Mint

And third consecutive year where the industry has started to slow, including emphasis. 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 in general?

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

That's good to know. The large deals are working very well. So I think for us, the 3,800,000,000.0 is incredible. We 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So my sense is that whole approach is in good shape. We we remain, I would say, at the forefront with clients on that. 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, We are seeing, for example, tremendous traction on enterprise applications and how they're being driven in new changes. Those are the ones that will support the future, the next stages.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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. 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 area is growing and quite good.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So we feel quite positive that over this approach that has worked, as you described, for the last several years for Infosys will continue to work for the next several years.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you. The next question from Veena Mani from The Times of India.

Veena Mani
Special digital content specialist at The Times Of India

Good evening gentlemen. Couple of questions here. We heard reports, at the 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?

Veena Mani
Special digital content specialist at The Times Of India

Also, the second question is, Infosys moved to a hybrid form of interview process. Is that also related to how talent is being fleshed out from the market, lateral and freshers? Does it also have to do with the fact that because of virtual interviews, there have been people who misused that format? Now TCS has made its bench policy a lot more stringent by saying that people can be on the bench only up to thirty five days. Is Infosys heading there given that the market is not all that great?

Veena Mani
Special digital content specialist at The Times Of India

Also, your ESG report had mentioned capability quotient that Infosys is moving from a digital quotient to capability quotient to mark its mark the progress of its employees. How will that have an impact on the appraisal, on the hikes and also the movement through maybe IGPs or also taking up projects on Accelerate and other things, if you could help me with some of these? And again, with TCS, 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 not all that great?

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Thanks.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So there are several try to get through them. The first one was on the MISO. 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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. This is a process that's been in use for the last twenty 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. On the bench point, I think was one of your other ones, we have no comment on the other company bench at Infosys.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

The way we have looked at this is employees are provided opportunities for training and through learning projects, and then they are deployed onto clan projects when they're ready. And that's the process we follow all through and we've been following for a long time now. Hybrid interview. Ah yeah, there I think 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've 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.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Every quarter for the last many quarters, we've seen an increase in the number of employees who are on campus. But overall, at a company level, we have a flexible approach, and that's sort of one of the elements of that.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

And then I think the report.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

So on the ESG report, the digital versus the capabilities metrics that we have been using, I don't think that is something that we use for the IGPs etc. That's a metric that is important from the ESG perspective, that's why we've started publishing that, but that's not necessarily imposing on the IGPs, etc. Internally. 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.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you, Bina. The next question is from Avik Das from The Business Standard.

Avik Das
Associate Editor at Business Standard

Hi, Sadil. Two questions and one for Jesh. 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 packaged goods seem to be under stress for all the obvious reasons. Now I just wanted to understand what really worked in your favor?

Avik Das
Associate Editor at Business Standard

What is it? Did you decline specific? And what really went your way? And, 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, feedback on the biggest market. How is it performing, from the BFSI side?

Avik Das
Associate Editor at Business Standard

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 going ahead? Thank you.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So let me the first,

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

Ajay should also comment a little bit more on on industry, but 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 in 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 or outside of consumer product where we see good activity, for example, in energy, utilities, for example, some of the work we're seeing in telco and so on.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So the market is quite strong. We see good traction with enterprise AI there as well and good traction some of the consolidation wins that we have seen on the large deals have come from that market. Maybe on manufacturing and margin?

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

Yes. So on manufacturing, while we have called out softness in some part of the manufacturing, especially the auto industrial and Europe, I think we have benefited from the consolidation and we have benefited from the large deals that we have won in the past. But we continue seeing softness or the concerns in terms of client spending in the areas that we've identified within manufacturing. On the margins, I did give a walk earlier in terms of the puts and takes of 20 basis point decline this quarter, 100 basis points was on account of comp and variable pay, 30 basis points was currency, 20 basis points was on account of investment that we made in sales. That was offset by the benefits that we got from Maximus, 70 basis points because of the pricing increase and the seasonality benefit.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

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 Maxima is still running. The proof of that was, you saw last year, we delivered 50 basis point life expansion despite multiple headwinds. We still see the Project Maxima delivering on multiple counts. That will be offset by the headwinds like lower growth.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

We are now talking about 1% to 3% growth. 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 year impact on the compensation, etcetera. Some of the large deals will start ramping up and there'll be transition effort, where we incur costs 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.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

We still aspire to increase margins from where we are.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you, Abhiq. The next question is from Sanjana from the Hindu business line.

Sanjana B
Business Reporter at The Hindu BusinessLine

Good evening, gentlemen. 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 FY 2026 in FY 2026, third party cost and revenues will be lower than in FY 2025? Because I think there was a it contributed to a significant decline, at least in the last fiscal or last quarter. And coming to hiring, I can see that the headcount has increased marginally between Q4 and Q1 this year.

Sanjana B
Business Reporter at The Hindu BusinessLine

So do you at all see any impact of AI and automation on hiring? Yes, just these. Thank you.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

So on the first one, I think we see the changes in the economic outlook with all of the changes going on in U. S. And Europe. We have not seen any change in specific client or a specific project situation. It's more overall what we were sharing earlier.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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. So there we're okay overall from the perspective, which is partially what's helped us with the growth I think on the hiring, recruiting and people, so we first have a plan for recruitment for this year for college and lateral revenue. We see with AI that there has been benefits that we see in terms of productivity.

Salil Parekh
Salil Parekh
CEO, MD & Executive Member of the Board at Infosys

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, the cost efficiency side. So we will continue with our hiring plan for this year.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you. The next question is from Ayanti Birra from the Financial Express.

Ayanti Bera
Senior Correspondent at Financial Express (India)

Hello. Hi. I'm not sure if this has been talked about already. Just give us the underlying reasons that encouraged you to increase the lower end of your revenue growth guidance.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

Yes. So 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 gone by, we quarter, we have a strong, deal with that is the reason why we we have increased our lower end from zero to 1%. 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.

Jayesh Sanghrajka
Jayesh Sanghrajka
EVP & Group CFO at Infosys

But at the lower end, the performance and the deals that we have won gives us better confidence at this point in time.

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

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

Rishi Basu
Rishi Basu
AVP & Global Head - Corporate Communications & PR at Infosys

Thank you and please join us for some high tea outside.

Analysts
    • Rishi Basu
      AVP & Global Head - Corporate Communications & PR at Infosys
    • Salil Parekh
      CEO, MD & Executive Member of the Board at Infosys
    • Ritu Singh
      Deputy Editor at CNBC-TV18
    • Jayesh Sanghrajka
      EVP & Group CFO at Infosys
    • Haripriya Suresh
      India Company News Correspondent at Reuters
    • Beena Parmar
      Assistant Editor at The Economic Times
    • Reshab Shaw
      Senior Correspondent at moneycontrol
    • Jas Bardia
      Senior Correspondent at Mint
    • Veena Mani
      Special digital content specialist at The Times Of India
    • Avik Das
      Associate Editor at Business Standard
    • Sanjana B
      Business Reporter at The Hindu BusinessLine
    • Ayanti Bera
      Senior Correspondent at Financial Express (India)
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