What drives INFY's consistent EPS surprises in 2025?

Infosys' consistent EPS surprises in 2025 can be attributed to several key factors: 1. **Strong Revenue Growth**: Infosys has reported robust revenue growth, which has exceeded market expectations. For instance, in Q3 FY25, the company's revenue increased by 7.6% year-on-year to Rs 41,764 crore, surpassing Bloomberg's estimate of Rs 41,353 crore. This consistent growth in revenue has directly contributed to higher EPS surprises. 2. **Strategic Initiatives**: Infosys' focus on strategic initiatives such as digital transformation, AI, and cloud services has been instrumental in driving growth. The company's emphasis on innovation and differentiation in these areas has resulted in strong demand for its services and increased profitability. 3. **Large Deal Wins**: Infosys has secured significant large deal wins, which have contributed to its revenue growth. In Q3 FY25, the company reported a large deal total contract value (TCV) of $2.5 billion, with 63% being net new. These large deals not only bring immediate revenue but also indicate a strong pipeline of future business, which supports the company's growth trajectory and EPS growth. 4. **Operational Efficiency**: Infosys has maintained a strong operating margin, which has been a key driver of its financial performance. In Q3 FY25, the company's operating margin came in at 21.3%, marking a slight increase both sequentially and year-on-year. This operational efficiency translates into higher EPS as a larger portion of revenue is retained as profit. 5. **Financial Health**: Infosys' financial health, as indicated by strong free cash flow and a low debt-to-equity ratio, provides a solid foundation for its business operations and growth initiatives. The company's free cash flow reached an all-time high of $1,263 million in Q3 FY25, reflecting its ability to generate cash and reinvest in the business. In conclusion, Infosys' consistent EPS surprises in 2025 are a result of its strong revenue growth, strategic initiatives, large deal wins, operational efficiency, and robust financial health. These factors combined have enabled the company to exceed market expectations and deliver strong financial performance.