Infosys, India's second-largest IT services firm, announced its Q3 FY26 results on January 14, 2026, reporting a mixed but generally optimistic performance. The company's consolidated net profit saw a 2.2% year-on-year decline to ₹6,654 crore. This profit dip was primarily attributed to a significant one-time charge of ₹1,289 crore (approximately $143 million) related to India's new labor codes, which impacted gratuity and leave liabilities. Other major Indian IT firms like TCS and HCLTech also reported similar impacts from these regulatory changes. Despite the profit contraction, Infosys's consolidated revenue from operations grew by a robust 8.9% year-on-year, reaching ₹45,479 crore. The company also secured substantial large deals worth $4.8 billion during the quarter, with 57% being net new engagements, indicating healthy business momentum. A key highlight that fueled investor confidence was Infosys's decision to revise its FY26 revenue growth guidance upwards to 3.0-3.5% in constant currency terms, an increase from its earlier forecast of 2-3%. The operating margin (IFRS reported) stood at 18.4%, with the adjusted operating margin at 21.2%. Following the announcement, Infosys's American Depository Receipts (ADRs) experienced a significant surge, jumping over 8% on January 14, 2026, and further by 10% on January 15, 2026. This strong ADR performance and the positive Q3 commentary led to a bullish sentiment among brokerages. Several firms, including Nuvama, Motilal Oswal, Nomura, and Emkay Global, maintained 'Buy' ratings and issued optimistic target prices, citing improved growth visibility and strong deal momentum driven by AI-led services. The market's focus shifted from the one-time impact on profit to the company's strong deal pipeline and positive outlook.