Infosys shares came under pressure after the Indian IT services major lowered its full-year FY2027 revenue growth forecast, despite reporting higher revenue and profit for the September quarter. The company cut its constant-currency revenue growth guidance to 1%–2% from 1.5%–3%, signalling a more cautious outlook for the remainder of the financial year. Its US-listed American Depositary Receipts (ADRs) fell around 6% in premarket trading following the results.
For the quarter ended September 30, 2026, Infosys reported revenue of ₹49,244 crore, up approximately 10.7% year on year, while net profit rose about 6.2% to ₹7,823 crore. The company also reported $5.2 billion in large deal wins and strong growth in AI-related revenue. However, investors focused on the reduced annual outlook and profit that fell short of analyst expectations.
Key Takeaways
- Revenue guidance cut: Infosys lowered its FY27 constant-currency revenue growth forecast to 1%–2%, from 1.5%–3%.
- Revenue increased: Q2 revenue rose 10.7% year on year to ₹49,244 crore.
- Profit grew more slowly: Net profit increased 6.2% to ₹7,823 crore, below analysts’ expectations.
- ADR reaction: Infosys ADRs fell approximately 6% in premarket trading after the earnings announcement.
- Large deals strengthened: The company reported $5.2 billion in large deal wins, compared with $3.1 billion in the year-ago quarter.
- AI business expanded: AI revenue represented 10.5% of revenue and grew 29% quarter on quarter, according to management.
- Dividend declared: Infosys announced an interim dividend of ₹26 per share.
Infosys Q2 FY27 Results: Revenue and Profit
Infosys delivered year-on-year growth in both revenue and net profit in the second quarter of FY27. However, the results presented a mixed picture: revenue marginally exceeded analyst expectations, while profit missed consensus estimates.
Quarterly financial performance
| Financial metric | Q2 FY27 | Q2 FY26 | Year-on-year change |
|---|---|---|---|
| Revenue from operations | ₹49,244 crore | ₹44,490 crore | +10.7% |
| Net profit | ₹7,823 crore | ₹7,364 crore | +6.2% |
| Operating margin | 21.0% | — | Company-reported Q2 FY27 figure |
| Large deal wins | $5.2 billion | $3.1 billion | Higher than the year-ago quarter |
Source: Infosys results coverage by Moneycontrol and Reuters. Figures are rounded where appropriate.
Revenue reached ₹49,244 crore, compared with ₹44,490 crore a year earlier. The increase reflected demand from areas including energy and utilities, alongside spending on artificial intelligence services.
Net profit rose to ₹7,823 crore from ₹7,364 crore. However, Reuters reported that analysts had expected profit of approximately ₹7,929 crore. The shortfall, combined with the weaker annual growth outlook, contributed to investor concerns.
Why Did Infosys Cut Its FY27 Revenue Guidance?
The main trigger for the negative market reaction was the reduction in the company’s revenue growth forecast.
| Guidance metric | Previous FY27 guidance | Revised FY27 guidance |
|---|---|---|
| Constant-currency revenue growth | 1.5%–3.0% | 1.0%–2.0% |
The revised range indicates that Infosys expects slower growth than it had previously anticipated. Even though the company reported higher quarterly revenue, investors assess an IT services business partly on its expected performance over the coming quarters.
The IT services industry is also experiencing structural changes as enterprise customers increasingly adopt AI tools and automation. These technologies create opportunities for providers to sell new services, but they can also reduce the amount of traditional work required to deliver software, consulting and business-process services.
Customers may increasingly expect technology providers to deliver productivity improvements rather than charge primarily for the number of hours worked. That shift can place pressure on traditional revenue models and pricing.
Infosys did not report a collapse in quarterly revenue. Instead, the guidance revision indicates that management has become more cautious about the pace of growth expected across the full financial year.
Infosys ADR Falls Around 6%: What It Means
An American Depositary Receipt represents shares of a foreign company that trade in the United States. Infosys ADRs are listed on the New York Stock Exchange, allowing US investors to gain exposure to the Indian IT company.
Following the results and lower guidance, Infosys ADRs fell approximately 6.3% to $12.40 in premarket trading on October 23, according to Barron’s. The decline followed a 3.7% gain in the previous US trading session.
The reaction illustrates how markets can respond negatively even when a company reports year-on-year growth. Investors typically compare results with expectations and assess whether management’s forward-looking outlook supports the stock’s valuation.
The ADR decline should also be distinguished from the movement in Infosys shares traded on Indian exchanges. US and Indian trading sessions occur at different times, and their prices can respond to different market conditions. A premarket ADR move is not automatically equivalent to the same percentage move in the Indian-listed shares.
AI Revenue Grows as Traditional IT Services Face Pressure
Artificial intelligence remains an important part of Infosys’ growth strategy.
Management said AI revenue accounted for 10.5% of total revenue and grew 29% quarter on quarter. The company is positioning itself to help large enterprises implement AI, modernize technology systems and integrate new tools into business operations.
The opportunity is substantial because many organizations need consulting, software integration, data infrastructure and ongoing support to deploy AI at scale. Large IT services providers can potentially benefit from this demand through implementation projects and long-term enterprise relationships.
However, AI also introduces a challenge for the traditional services model. If AI tools allow employees to complete tasks more quickly, customers may demand lower prices for work that previously required more billable hours. Providers must therefore find ways to turn productivity gains into new revenue opportunities rather than simply delivering the same work with fewer resources.
Infosys’ AI revenue growth is encouraging, but it does not by itself resolve concerns about overall revenue growth. Investors will want to see whether AI-related business can expand enough to offset slower growth in other service lines.
Large Deal Wins Provide Some Support
Infosys reported $5.2 billion in large deal wins during Q2 FY27, compared with $3.1 billion in the same quarter last year. The company said the total included a mega deal worth more than $2 billion.
Large deal wins are important because they can provide visibility into future business activity. They may include multi-year technology transformation projects, consulting engagements and outsourcing contracts.
However, deal value should not be confused with revenue recognized in the same quarter. Contracts are generally delivered over time, and their contribution to reported revenue depends on project schedules, implementation milestones and customer spending.
The increase in deal wins therefore offers a positive signal about the company’s sales pipeline, but investors will also need to monitor how quickly those contracts translate into revenue and profit.
Margins and Dividend: What Investors Should Know
Infosys reported an operating margin of 21% for Q2 FY27 and maintained its full-year operating-margin guidance at 20%–22%. Management said cost controls and operational efficiency helped maintain margins amid market volatility.
The company also announced an interim dividend of ₹26 per share, representing a 13% increase from the previous year, according to its results announcement. Infosys set November 3, 2026, as the record date and November 11, 2026, as the payout date.
The dividend provides a direct return to eligible shareholders, but it does not eliminate the uncertainty surrounding the company’s growth outlook. Investors generally evaluate dividends alongside earnings, cash generation, business prospects and valuation.
The Bigger Picture
Infosys’ Q2 results highlight the tension facing India’s IT services industry as businesses expand their AI offerings while customers reconsider how they purchase technology services. Revenue growth, deal bookings and AI-related business remain important indicators, but investors are also looking for evidence that providers can sustain growth as automation changes delivery models.
The reduction in FY27 guidance suggests that Infosys sees a more challenging growth environment than it previously expected. Stronger deal wins and expanding AI revenue offer reasons for optimism, but the company’s ability to convert those opportunities into sustained revenue growth will be central to its performance in the coming quarters.
FAQs
1. What were Infosys’ Q2 FY27 results?
Infosys reported revenue of ₹49,244 crore for the quarter ended September 30, 2026, up approximately 10.7% year on year. Net profit rose about 6.2% to ₹7,823 crore.
2. Why did Infosys ADRs fall around 6%?
The ADR decline followed the company’s decision to reduce its full-year revenue growth guidance. Investors were also concerned that quarterly net profit fell short of analyst expectations.
3. What is Infosys’ revised FY27 revenue growth guidance?
Infosys lowered its constant-currency revenue growth forecast to 1%–2%, from its earlier range of 1.5%–3%.
4. How much AI revenue did Infosys report?
Management said AI revenue accounted for 10.5% of total revenue and grew 29% quarter on quarter.
5. What dividend did Infosys announce?
Infosys announced an interim dividend of ₹26 per share, with November 3, 2026, as the record date and November 11, 2026, as the payout date.
Looking Ahead
Investors will watch Infosys’ upcoming quarterly results for signs that the revised guidance is achievable and that large deal wins are translating into recognized revenue. The pace of enterprise AI adoption, client spending decisions, pricing pressure and operating margins will remain important indicators of performance.
For Infosys, the challenge is to turn AI-related demand into durable growth while managing the disruption that AI itself creates for traditional IT services. The latest results show that the company continues to win business and expand its AI activity, but the lower FY27 forecast means investors may require clearer evidence of sustained growth before sentiment improves.
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