Infosys Growth Outlook Sours Despite Strong Deal Wins

Infosys reported a 6% increase in net profit to ₹7,823 crores for Q2, announcing an interim dividend of ₹26 per share. However, the company cut its annual growth forecast to 1-2%, citing market challenges. Investors are watching for strategic adjustments.

Infosys reported Q2 FY27 revenue of $5.145B, up 1.5% YoY, with AI revenue growing 29% QoQ to 10.5% of total revenue. Despite a $5.2B large-deal pipeline, the company cut its FY27 growth guidance to 1%-2% from 1.5%-3%, citing market pressures. Net profit rose 6.2% YoY to ₹7,823 crore.

HCLTech led four major Indian IT firms in Q2 revenue growth at 2.3%, followed by Infosys at 1.2%, TCS at 0.5%, and Wipro with flat growth. TCS reported $9.6B in total contract value, while Infosys and HCLTech reported $5.2B and $3.26B, respectively. AI revenue varied, with TCS at $3.1B annualized, Infosys at 10.5% of revenue, and HCLTech at $219M quarterly. Infosys lowered FY27 guidance to 1-2% growth, while HCLTech forecast 2.5-4% growth.

Infosys reported a 6.2% YoY net profit rise to 7,823 crore, missing estimates. Revenue grew 10.7% YoY. The company lowered its FY27 growth guidance to 1-2%, its weakest in seven years. AI revenue was 10.5% of total, up 29% sequentially. Shares fell 8% in pre-market trading. The company proposed a 13% higher interim dividend.

Infosys reported Q2 revenue and profit in line with expectations, but lowered its full-year guidance, citing competitive pressure and weak business verticals. Despite a $2B deal and strong sequential growth, the stock may face pressure due to cautious management commentary and reduced growth outlook. Operating margin held steady at 21%.

Infosys reduced its FY27 constant-currency revenue growth forecast to 1%-2% from 1.5%-3%, citing pricing pressure and soft volumes. Q2 revenue was $5.145B, up 1.3% YoY. AI revenue grew 29% sequentially. The company maintained its operating margin forecast of 20%-22%.