Infosys AI Revenue Rises 29% in Q2, FY27 Growth Guidance Cut
Infosys reported Q2 revenue of $5.145B, up 1.5% YoY, with AI revenue growing 29% sequentially to 10.5% of total revenue. The company cut its FY27 revenue growth guidance to 1%-2% from 1.5%-3%, citing cautious client spending. Operating margin remained at 21%, and free cash flow was $928M, down 15.7% YoY. Large deals totaled $5.2B, with 62% as net new business, including a $2B mega deal.
How this was made
The 30-second read
Why it matters
The guidance cut is likely to trigger a short‑term price decline, while the AI revenue growth and mega‑deal hint at longer‑term upside potential.
Market read
Guidance revision for a major Indian IT services company can affect sector sentiment and Indian market indices.
What to watch
Large $2B mega‑deal pipeline and AI tooling partnerships could offset slower top‑line growth later in FY27.
Background
Infosys reported modest Q2 revenue growth and a 29% sequential rise in AI revenue, but trimmed full‑year growth guidance amid cautious client spending.
Ticker impact
Infosys cut FY27 revenue growth guidance to 1%-2% from 1.5%-3% and reported Q2 revenue of $5.145B.
downward pressure as investors price in weaker growth outlook
Guidance revisions are material for a large-cap IT services firm and directly affect valuation multiples.
Market effects
May weigh on broader Indian IT services sector as peers could face similar growth pressures.
Potential drag on Indian market indices, especially NIFTY IT.
Could influence sentiment toward global tech services stocks amid AI investment scrutiny.
Counterpoint
If AI revenue acceleration continues, the guidance cut may be overly cautious, presenting a buying opportunity.
Key entities
- CompanyInfosys
Indian IT services firm reporting Q2 results and guidance cut.
- ExecutiveSalil Parekh
CEO and Managing Director of Infosys, quoted on large deals and AI revenue.
