Infosys Q1 Results Rattle Dalal Street; Nifty & Sensex Close in the Red

Dalal Street saw red on Thursday as the first major wave of Q1 FY26 earnings reports, particularly from IT bellwether Infosys, failed to inspire investor confidence, pulling the benchmark indices lower.

The Indian stock market succumbed to selling pressure as the session progressed. The Nifty 50 ended the day at 25,062.10, down 157.80 points (0.63%), while the BSE Sensex closed at 82,184.17, a drop of 542.47 points (0.66%). The bearish sentiment was widespread, with 1,819 stocks declining on the NSE compared to only 1,025 advancing stocks.

The Infosys Report Card: A Mixed Verdict

All eyes were on Infosys as it unveiled its results for the first quarter of the 2025-26 financial year. The IT giant reported a mixed set of numbers that left the market wanting more.

On a quarter-on-quarter (QoQ) basis, the company’s consolidated net profit saw a decline of 1.6% to ₹6,921 crore. However, revenue from operations showed a sequential increase of 3.3% to ₹42,279 crore.

Perhaps the most crucial takeaway was the company’s revised guidance. Infosys raised its revenue growth forecast for FY26 to a range of 1-3% in constant currency, a slight upgrade from the earlier projection of 0-3%. Despite this positive signal, the market appeared to focus on the immediate pressure on profitability, as the company’s EBIT margin dipped to 20.8% from 21% in the previous quarter. The muted performance from a heavyweight like Infosys had a cascading effect on the entire IT sector, with the Nifty IT index emerging as one of the day’s top sectoral losers.

Beyond Infosys: A Look at Other Key Earnings

While Infosys dominated the headlines, several other companies also reported their Q1 numbers, painting a diverse picture of corporate health:

• Tata Consumer Products: The FMCG major reported a 15.1% year-on-year (YoY) increase in net profit to ₹334 crore. However, its revenue and EBITDA fell short of analyst expectations, with margins coming under pressure due to higher input costs.
• Coforge: In contrast to the broader IT trend, Coforge posted a strong 21.5% QoQ jump in net profit to ₹317.4 crore. The firm also saw its EBITDA margin expand, showcasing improved operational efficiency.
• Adani Energy Solutions: The Adani group company reported a consolidated net profit of ₹538.94 crore for the June quarter, a significant turnaround from the loss in the year-ago period, driven by strong performance in its transmission business.
• Supreme Industries: The plastics manufacturer saw its Q1 profit slip by 26% YoY, despite a rise in sales volume, indicating significant pressure on its margins.

This mixed bag of results suggests that while some pockets of the economy are performing well, margin pressures and a challenging global environment remain key concerns for corporate India.

What Investors Should Watch Next

This market phase calls for a cautious and informed approach. Here are a few key factors to monitor:

• The Earnings Calendar: The earnings season is far from over. Keep a close watch on the results of other major companies, especially from the banking and financial services sector, as they hold significant weight in the indices.
• Global Cues: The Indian market is not immune to global events. Recent developments, such as the new US-Japan strategic trade and investment agreement, can influence global sentiment and capital flows. Pay attention to news on global inflation and central bank policies.
• Nifty’s Technical Levels: Market experts suggest the Nifty has crucial support around the 25,100 level. A sustained break below this could signal further weakness. On the upside, resistance is seen near 25,320.
• Institutional Investor Activity: Foreign Portfolio Investors (FPIs) have recently been net sellers in the Indian market. Tracking the flow of institutional money can provide valuable insights into broader market sentiment.

The current market is caught in a tug-of-war between long-term growth optimism and short-term profitability concerns. As the earnings season unfolds, a clearer picture will emerge. For now, investors should brace for continued volatility.

This article is for informational purposes only and does not constitute investment advice. Please conduct your own research before making any investment decisions.