Accumulate Infosys; target of Rs 1200: Prabhudas Lilladher
Infosys (INFO) reported Q2FY27 revenue growth of 1.2% QoQ, slightly above estimates, but lowered FY27 revenue growth guidance to 1-2% due to softer volumes and pricing pressures. AI revenue grew to $540mn, and a $2bn+ mega-deal was secured. EBIT margin declined to 21.0%. Prabhudas Lilladher reduced FY27 revenue growth estimate to 1.8%.
How this was made
The 30-second read
Why it matters
The guidance downgrade is the primary new information, likely to affect stock valuation.
Market read
First report of a guidance cut for a large-cap IT services company; material for traders.
What to watch
AI revenue growth and large deal pipeline could offset slower top‑line growth.
Background
Infosys reported Q2 FY27 results with modest revenue growth and announced a FY27 guidance cut.
Ticker impact
Infosys cut FY27 revenue growth guidance to 1–2% and kept EBIT margin guidance at 20–22% after Q2 FY27 results.
downside pressure as investors price in lower growth outlook
Revenue guidance cut is a material new fact for a large-cap IT services firm, likely to trigger sell pressure.
Market effects
May weigh on Indian IT services sector and peers like TCS, Wipro.
Could dampen sentiment on Indian equity markets in early trade.
Limited to investors with exposure to emerging‑market tech services.
Counterpoint
If the mega‑deal ramps up faster than expected, the guidance cut may be overly cautious.
Key entities
- CompanyInfosys Ltd.
Indian IT services firm listed in the US as INFY.
