Infosys claims to be massively scaling up its AI initiatives, with CEO Salil Parekh stating that the company is deeply engaged in enterprise AI projects spanning sales, marketing, operations, customer service and software development.
“We have a large team of FTEs and are doing a lot of projects on enterprise AI with clients,” Parekh said while announcing the Q2 FY26 results. He added that Infosys has become the “AI partner of choice” for many of its global clients.
While Infosys says that it continues to track internal metrics on AI’s revenue contribution, the company has not yet disclosed a number to the public. This is unlike HCLTech, which said that AI contributed to $100 million in revenue for the firm in this quarter.
“Our focus has been mainly to share what we’re doing on AI externally, and that’s what we are doing. We track all of that internally, and as the right time comes, we’ll start sharing that externally,” Parekh noted, while emphasising that its market position fits well to capitalise on the growing AI opportunity.
Despite this low confidence in revenue from AI, Infosys reported strong Q2 results. Revenue rose 8.6% year-on-year to ₹44,490 crore, while operating margin stood at 21.0%, slightly lower than last year.
The company’s free cash flow reached $1.1 billion, equivalent to 131.1% of net profit, while the total contract value of large deal wins was $3.1 billion, 67% of which consisted of net new deals.
Then, What’s in Store?
When asked if the company would continue with the current asset-light model of embedding AI in software services or if it is looking at entering the AI infrastructure play and potentially deploying significant capital, Parekh said the company is comfortable with its current strategy.
Addressing whether legacy modernisation deals are generating more business on a net-to-net basis due to AI tools, the CEO said that modernisation presents a significant opportunity because of AI.
“In the past, modernisation could be carried out without AI tools, but clients needed a longer time horizon. With AI tools, that timeline shortens, and the ROI for clients improves substantially. As these AI tools continue to mature, we expect to see their deployment increase across more modernisation programs.”
Hiring Strategy
On the talent front, Infosys CFO Jayesh Sanghrajka said that the firm has added 8,000 employees in the July to September quarter and reaffirmed plans to hire between 15,000 and 20,000 freshers in FY26.
The company clarified that all freshers undergo customised training programs depending on business requirements. “We don’t split how many are high-skilled versus regular,” Sanghrajka said.
Its attrition levels have increased to 14.3% from 12.9% in the same quarter last year.
Infosys also confirmed that incentives were being offered for staff relocating to the Hubballi campus, while local hiring in the region would take place in due course. “We have already hired a few people in Hubballi and will decide on future plans during our annual cycle,” Sanghrajka clarified.
Infosys has raised its FY26 revenue growth outlook to 2-3%, up from the earlier 1-3%, citing greater confidence in client demand.
“Typically, the second half is slower than the first, but we’ve seen good traction, especially in manufacturing and financial services,” Parekh said. Retail remains constrained but shows a healthy pipeline. The company reiterated that only a minority of its US workforce requires visa sponsorship.
Infosys has built multiple US innovation and delivery hubs focused on digital, AI and technology, along with local university partnerships and a dedicated training facility.
What About AI for Others?
While Infosys has been developing hundreds of AI agents since the last two quarters, there has been no discrete mention of the benefit it earned from it. This quarter, the company refrained from many AI-related announcements despite other IT firms rolling in with breaking news.
HCLTech showed the most confidence in AI this quarter, with $100 million in AI revenue from its operations contributing to about 3% of total revenue. It managed to post an 11% YoY revenue growth to ₹31,942 crore, though profits remained flat at ₹4,236 crore. CEO C Vijayakumar called it a “standout quarter on every front”.
Meanwhile, TCS has announced plans for a $6 billion AI data centre in the next five years and is also conducting an AI ideathon for 2,75,000 of its employees. It posted a revenue of ₹63,437 crore in Q2 FY26, up 1.3% YoY and down 3.1% in constant currency, reflecting continued softness in discretionary tech spending.
Wipro, despite a slow 2% growth this quarter, is going all in on Wipro Intelligence, with bookings surpassing $9.5 billion for the first half of 2026. The company booked large deals worth $2.9 billion, marking a 90.5% YoY jump, while total deal bookings reached $4.7 billion.
Tech Mahindra also announced plans to build a one trillion parameter sovereign LLM with IndiaAI Mission, for which it got selected last month. The firm posted a net profit of ₹1,194 crore in the September quarter, up 5% sequentially from ₹1,140.6 crore in Q1 FY26, but a drop of 4.4% YoY.
Infosys, despite showing massive growth this quarter, skipped revealing its generative AI and agentic AI strategy and numbers. Parekh, however, has indicated that this might soon change.
(With inputs from Mohit Pandey)
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