Infosys sees AI as growth engine, not a threat, says Nandan Nilekani

BENGALURU: If artificial intelligence is rewriting the rules of technology, Infosys believes it has already found its place in the next chapter. Addressing shareholders at the company’s 45th Annual General Meeting, chairman Nandan Nilekani delivered a clear message: despite growing concerns that AI could automate software development and reduce the need for technology services firms, Infosys sees the AI revolution as a major growth opportunity rather than an existential threat.

“AI will not replace companies like ours. It will amplify those who move with purpose and adapt with speed,” Nilekani told shareholders, arguing that enterprise AI adoption remains far more complex than simply deploying coding tools.

The remarks came alongside a solid set of financial results for fiscal 2026. Infosys reported revenue of US$20.2 billion, representing 3.1 per cent constant-currency growth, while maintaining an adjusted operating margin of 21 per cent. The company generated free cash flow of US$3.7 billion, equivalent to 112.6 per cent of net profit, marking the second consecutive year in which free cash flow exceeded net earnings.

The company also secured large deals worth US$14.9 billion during the year, with 55 per cent classified as net new business, underscoring continued client confidence despite a challenging macroeconomic environment.

Shareholders are set to benefit as well. The board has recommended a final dividend of Rs 25 per share, taking the total dividend for fiscal 2026 to Rs 48, including the interim dividend already paid. Combined with a recently completed share buyback, total shareholder returns represented nearly 114 per cent of free cash flow.

Beyond the numbers, much of the AGM focused on the opportunities emerging from AI-driven transformation. Nilekani argued that the widespread adoption of generative AI is accelerating legacy technology modernisation efforts, forcing enterprises to upgrade decades-old systems and creating substantial demand for technology services.

According to Infosys, the greatest opportunity lies in integrating AI models and intelligent agents with the mission-critical enterprise systems that continue to power global businesses. The company estimates that AI-first services could represent a market opportunity worth between US$300 billion and US$400 billion by 2030.

To capture that growth, Infosys is leaning heavily on its AI and cloud platforms, including Infosys Topaz and Infosys Cobalt. The company said it is already collaborating with 90 per cent of its top 200 clients on AI initiatives, positioning itself as a strategic partner in enterprise AI deployment.

Nilekani also highlighted the continuing importance of talent development in the AI era. Infosys recruited more than 20,000 graduates during fiscal 2026 and ended the year with a workforce exceeding 325,000 employees. Rather than viewing automation as a threat to employment, the company said productivity gains would allow talent to be redeployed into emerging growth areas.

The year also saw significant dealmaking activity. Infosys completed the acquisitions of MRE Consulting and The Missing Link Group, while finalising agreements involving Versent Group through a joint venture with Telstra. The company also completed the acquisitions of Stratus Global and Optimum Healthcare IT, strengthening its capabilities in insurance and healthcare technology services.

On the governance front, independent director Nitin Paranjpe was appointed vice-chairman in April. Shareholders also approved the appointment of Diane Enberg Jurgens as an independent director and the reappointment of Helene Auriol Potier for a second term.

Sustainability and social impact remained key themes. Infosys achieved carbon neutrality for the seventh consecutive year and said renewable energy now accounts for more than 81 per cent of its India operations. Through Infosys Foundation, the company undertook 200 projects in India that impacted seven million lives during the year, while its Infosys Springboard digital learning initiative has now reached 15 million people.

Perhaps the most telling moment came when Nilekani addressed concerns that AI-generated code could reduce the need for technology service providers altogether. His response was that coding represents only one part of a much larger enterprise technology puzzle involving architecture, cybersecurity, governance, integration and business transformation.

As companies worldwide race to adopt AI, Infosys is positioning itself not as a bystander to disruption, but as one of its architects. In Nilekani’s words, the industry is trying to skate to where the puck is going. Infosys, he suggested, believes it is already there.