Infosys Q4 results preview: Here are 10 things to watch out for

Earnings announcement by the Bengaluru-based IT company assumes significance in fourth quarter of financial year 2025 in the backdrop of ongoing trade wars igniting fears of recession and spike in inflation in the United Stares, the biggest market for Indian IT companies, analysts at multiple brokerages said.

Market participants will closely watch out for the management commentary in challenging environment for the IT companies.

The IT sector has been going through a turmoil since the start of this year owing to uncertain global macro-economic environment.

The measure of IT shares on the National Stock Exchange, NIFTY IT index, has so far this year dropped 23% massively underperforming the NIFTY50 index which is down 1.33% year-to-date.

Infosys stock has also faced selling pressure as it has corrected 24% so far this year.

Here are 10 things to watch out for in Infosys in Q4

Market participants will keep a close eye on how it navigates a seasonally weak quarter compounded by global macro headwinds. The broader Indian IT sector, heavily dependent on the US market, is witnessing a challenging environment — with tariff risks, delayed interest rate cuts and paused discretionary spending clouding near-term visibility.

Revenue trend and growth outlook

Infosys is expected to report a 0.9% sequential revenue decline in constant currency (CC) terms and a 1.2% dip in dollar terms, according to multiple brokerage reports. While in line with guidance, it reflects continued pressure from weak discretionary spending and project delays.

EBIT margin compression

Margins are expected to decline by 80–100 bps quarter-on-quarter (QoQ), primarily due to wage hikes for junior employees and increased visa costs. Market participants will watch out for how well Infosys' Project Maximus’ efficiency gains offset these pressures.

Large deal wins and TCV

Deal wins remain a critical metric. Infosys closed December quarter with $2.5 billion in total contract value (TCV) — a 21.9% annual decline. Investors will look for signs of pickup in March quarter and whether large deal ramp-ups are gaining traction.

FY26 guidance

Management commentary on FY26 earnings guidance will be closely monitored. Analysts expect Infosys to guide for 2–4% CC revenue growth and margin in range of 20–22%.

Discretionary spending

With US companies delaying IT budgets and large transformation projects, commentary on the revival of discretionary spending and any green shoots into FY26 will be crucial.

Sectoral outlook

Performance in key verticals such as financial services and retail — where some momentum was seen — will be key. Any change in demand trends here will significantly impact revenue visibility.

Generative AI momentum

Investors will closely look out for updates on Infosys’ GenAI-led transformation initiatives. New AI-driven deal inflows and adoption rate could become a bellwether for long-term growth.

Deal pipeline

While pipeline commentary has been strong, the real test lies in conversion. Updates on project run-offs, delays, and win-rates will give a clearer picture of demand health, analysts said.

Hiring trends

In a cautious demand environment, Infosys’ stance on hiring, fresher onboarding, and utilisation rates will offer insight into future growth planning and cost strategy and will be closely eyed by market participants.

Geopolitical developments

Tariff wars and policy uncertainty in the US continue to put pressure on discretionary spending by US corporates. Any commentary on shifting budget priorities or deal cycles in North America and Europe could hint at timelines for recovery, analysts added.