Infosys Cuts FY27 Revenue Growth Guidance to 1%–2% After Q2 Results

Infosys has reduced its revenue growth guidance for the financial year ending March 2027 to 1%–2% in constant-currency terms, compared with its previous forecast of 1.5%–3%. The revision came on October 23, 2026, as India’s second-largest IT services company reported its results for the July–September quarter. The lower forecast signals a more cautious outlook despite higher quarterly revenue and continued demand for artificial intelligence services.

Infosys reported revenue of ₹49,244 crore for the second quarter of FY27, up 10.7% from a year earlier, while consolidated net profit increased 6.2% to ₹7,823 crore. Large deal wins reached $5.2 billion, and the company reported growth in AI-related revenue. However, the weaker full-year outlook highlights the challenges of converting technology demand into sustained growth as clients reassess spending, seek productivity gains and adjust their traditional outsourcing arrangements.

Key Takeaways

• FY27 revenue guidance cut: Infosys lowered its constant-currency growth forecast to 1%–2% from 1.5%–3%.
• Revenue increased: Q2 revenue rose 10.7% year over year to ₹49,244 crore.
• Profit grew: Consolidated net profit increased 6.2% to ₹7,823 crore.
• Large deals strengthened: Total large deal wins reached $5.2 billion, compared with $3.1 billion in the year-ago quarter.
• AI revenue expanded: AI revenue accounted for 10.5% of revenue and grew 29% quarter over quarter, according to the company’s management.
• Dividend announced: Infosys declared an interim dividend of ₹26 per share, with November 3, 2026, as the record date.

Why Infosys Cut Its FY27 Revenue Guidance

The revised guidance suggests Infosys expects growth to remain modest through the rest of FY27. Its earlier forecast, announced in July, anticipated revenue growth of 1.5%–3% in constant-currency terms. The new range of 1%–2% reduces both ends of that forecast.

Constant-currency growth measures changes in revenue after removing the effects of exchange-rate movements. It helps investors assess the underlying performance of the business without currency fluctuations obscuring changes in demand.

The lower forecast comes as technology customers remain selective about spending and increasingly focus on measurable returns from their IT investments. Large transformation programmes may continue, but discretionary projects can be delayed, reduced or renegotiated when clients face uncertainty.

Artificial intelligence is adding another layer of complexity. While companies are investing in AI implementation, automation can also help them complete work with fewer billable hours. That creates pressure for service providers whose traditional contracts have often been based on the time and staffing required to deliver projects.

The guidance reduction does not mean Infosys is losing revenue across every business area. Rather, it indicates that management expects the overall growth environment to remain challenging despite opportunities in AI and large transformation deals.

Infosys Q2 FY27 Results at a Glance

The September-quarter results showed year-over-year growth in both revenue and profit, although net profit fell short of the analyst estimate cited by Reuters.

Financial metric	Q2 FY27	Year-over-year change
Revenue from operations	₹49,244 crore	+10.7%
Consolidated net profit	₹7,823 crore	+6.2%
Operating margin	21.0%	—
Large deal wins	$5.2 billion	Up from $3.1 billion
Interim dividend	₹26 per share	—

Sources: Reuters and Moneycontrol.

Revenue narrowly exceeded the average analyst expectation of ₹49,132 crore, according to Reuters. Net profit, however, was below the ₹7,929 crore estimate cited in the same report.

The figures show that Infosys continued to expand its business compared with the previous year. Nevertheless, quarterly growth and full-year guidance measure different things: the first reflects reported performance, while the second communicates management’s expectations for the coming quarters.

Large Deal Wins Reach $5.2 Billion

Large deal bookings were one of the stronger elements of the results. Infosys reported $5.2 billion in large deal wins for the quarter, compared with $3.1 billion in the corresponding period a year earlier.

These contracts can support future revenue by giving the company a pipeline of projects to implement. Large transformation programmes may involve modernising enterprise systems, moving applications to the cloud, integrating AI and improving operational efficiency.

However, a deal’s total contract value is not the same as revenue recognised during the quarter. Projects may take time to begin, and their revenue contribution depends on implementation schedules, contractual terms and the pace at which customers deploy the work.

That distinction helps explain why strong bookings can coexist with a cautious annual growth forecast. The company must convert its pipeline into active projects and recognised revenue while accounting for changes in client budgets and delivery timelines.

AI Revenue Grows as Traditional IT Models Change

Artificial intelligence is becoming an increasingly important part of Infosys’ business. Management said AI revenue represented 10.5% of total revenue and grew 29% quarter over quarter.

The company is working with enterprise clients on AI adoption, including technology-led transformation programmes. Such projects can involve integrating AI into business processes, modernising applications and helping organisations use automation to improve productivity.

Yet AI presents a two-sided opportunity for IT services companies. On one hand, businesses need consultants and technology partners to select, implement, secure and manage AI systems. On the other, AI tools can automate tasks that previously required large teams of software engineers or support staff.

Clients may consequently expect projects to be delivered faster or at a lower cost. This can put pressure on revenue models built around employee hours, even when the underlying technology work remains important.

For Infosys, the longer-term challenge is to capture more value from AI-enabled services and transformation work rather than relying exclusively on traditional staffing-based contracts.

Operating Margin and Dividend Announcement

Infosys reported an operating margin of 21% for Q2 FY27. Chief Financial Officer Jayesh Sanghrajka attributed the stability of margins to cost and operational efficiency measures alongside the investments required by the business.

Maintaining margins is important when revenue growth is limited. Technology services companies need to balance employee costs, investments in AI capabilities, delivery expenses and pricing pressure while protecting profitability.

The company’s board also declared an interim dividend of ₹26 per share. Infosys set November 3, 2026, as the record date and November 11, 2026, as the payout date, according to Moneycontrol.

The dividend is a separate aspect of the financial results. It does not change the revised revenue forecast, which remains an indicator of the company’s expectations for its operating performance over the full financial year.

What the Guidance Cut Means for India’s IT Sector

Infosys’ lower forecast comes at a time when India’s IT services industry is adapting to slower discretionary spending and the growing influence of generative AI.

Large enterprises continue to need technology partners for cloud migration, cybersecurity, data infrastructure and AI implementation. But customers are also scrutinising the cost of these projects and increasingly connecting payments to productivity improvements and business outcomes.

That shift can affect traditional outsourcing companies in several ways. Some projects may take longer to receive approval, while others may proceed with smaller teams or different pricing structures. AI-related work can create new revenue opportunities, but it may also reduce the amount of labour required for existing services.

Investors will therefore be watching not only deal bookings and quarterly revenue, but also how quickly contracts convert into sales, whether margins remain stable and how much AI-related demand contributes to overall growth.

Infosys’ revised guidance provides one indication of management’s expectations, but it does not establish that every Indian IT company faces the same outlook. Each provider has a different client mix, service portfolio and exposure to AI-related opportunities.

The Bigger Picture

The latest results illustrate the gap between strong pockets of technology demand and the broader challenge of achieving consistent revenue growth. Infosys is winning large deals and expanding AI-related business, yet it has still reduced its forecast for FY27. That combination suggests that growth opportunities are present but may take time to translate into revenue at scale.

The industry’s business model is also evolving. As clients increasingly demand faster delivery and measurable productivity gains, IT services companies will need to demonstrate value beyond the number of people assigned to a project. Infosys’ progress in converting large deals into revenue, growing AI services and maintaining margins will be central to assessing its performance over the remaining quarters of FY27.

FAQs

1. What is Infosys’ new FY27 revenue growth guidance?

Infosys has lowered its FY27 revenue growth guidance to 1%–2% in constant-currency terms, from its earlier forecast of 1.5%–3%.

2. How much revenue did Infosys report in Q2 FY27?

Infosys reported revenue from operations of ₹49,244 crore for the July–September 2026 quarter, an increase of 10.7% year over year.

3. What was Infosys’ Q2 FY27 net profit?

Consolidated net profit rose 6.2% year over year to ₹7,823 crore. The figure was below the analyst estimate of ₹7,929 crore cited by Reuters.

4. How much did Infosys win in large deals?

Infosys reported large deal wins worth $5.2 billion in Q2 FY27, compared with $3.1 billion in the year-ago quarter.

5. Why is AI both an opportunity and a challenge for Infosys?

AI creates demand for consulting, implementation and enterprise transformation services. At the same time, automation can reduce the hours required for traditional IT work, prompting clients to seek lower costs and productivity-linked pricing.

Looking Ahead

Investors will be watching how Infosys converts its $5.2 billion in large deal wins into recognised revenue during the remaining quarters of FY27. Demand from energy and utilities, the pace of enterprise AI adoption, project implementation schedules and client spending decisions will help determine whether the company can deliver growth within its revised 1%–2% range.

The longer-term question is whether AI-related services can become a sufficiently large source of growth to offset pressure on traditional IT contracts. Infosys’ ability to expand AI revenue, maintain operating margins and adapt its pricing models will be important as the company navigates a changing technology services market.