Infosys has cut its growth forecast for the second quarter in a row, and the market did not take it lightly. The Bengaluru-based IT major on Friday reported a 6.2% rise in consolidated net profit to Rs 7,823 crore for the quarter ended September 30, 2026, but trimmed its FY27 revenue growth guidance to 1-2% in constant currency, down from 1.5-3%.
The announcement came during trading hours on October 23, 2026, and Infosys ADRs slipped about 6% in pre-market trade, quoted at $12.40 against the previous close of $13.22. The message from investors was clear: the quarter met estimates, but the outlook is what matters right now.
The numbers: steady, not spectacular
Consolidated revenue from operations rose 10.2% year-on-year to Rs 49,244 crore, up from Rs 44,490 crore in the same quarter last year and Rs 48,211 crore in the June 2026 quarter. In dollar terms, revenue stood at $5,145 million, growing 1.5% year-on-year in constant currency.
The bottom line grew 6.2% to Rs 7,823 crore, compared with Rs 7,364 crore a year ago and Rs 7,769 crore in the preceding quarter. Operating profit increased 10.4% to Rs 10,330 crore, and the operating margin held steady at 21.0%, right in the middle of the company’s 20-22% full-year guidance, which it retained.
- Net profit: Rs 7,823 crore, up 6.2% YoY
- Revenue: Rs 49,244 crore, up 10.2% YoY ($5,145 million)
- Large deal wins: $5.2 billion TCV, 62% net new
- AI revenue: 10.5% of total revenue, up 29% quarter-on-quarter
- Interim dividend: Rs 26 per share, record date November 3
Why the guidance cut stung
The cut is sharper than most analysts expected. The Street had broadly anticipated a trim to 1.5-2.5%, but Infosys pulled both ends down to 1-2%, signaling a more cautious view of the second half of the fiscal year.
Chief Financial Officer Jayesh Sanghrajka did not sugarcoat the reasons. Speaking at the post-earnings press conference, he said the second quarter was softer and volumes continued to remain soft. “We have seen pricing pressure on the back of competitive intensity and higher ask on productivity. All that is baked in our revised guidance as we look forward,” he said.
This is the second consecutive quarter of guidance trimming. In the June quarter, Infosys had already narrowed its full-year forecast to 1.5-3% from 1.5-3.5%, citing macroeconomic uncertainty.
AI is the bright spot, and the sore spot
Artificial intelligence was the quarter’s standout metric: AI-led revenue accounted for 10.5% of total revenue and grew 29% sequentially, with CEO and MD Salil Parekh noting good growth in AI. Large deal wins were also strong at $5.2 billion, including a mega deal worth more than $2 billion, up from $3.1 billion in the year-ago quarter.
The same AI boom unlocking new revenue is also challenging the traditional IT services model. Clients increasingly tie fees to technology-led productivity gains rather than hours worked, forcing India’s $315 billion IT industry to overhaul business models and offer steep discounts.
The contrast with peers was striking. TCS and HCL Technologies, which reported earlier this week, met estimates and saw their stocks surge on AI revenue cheer. Infosys has the AI story too, but its clients appear to be demanding more productivity for less money.
Segments: life sciences lead, retail and hi-tech lag
Life sciences was the fastest-growing vertical, with revenue rising 32.5% in constant currency. Energy, utilities, resources and services grew 7.3%, while communication revenue increased 4.1%. Financial services, the largest segment at 28% of total revenue, grew just 2.1%.
On the weak side, hi-tech revenue fell 17.3% in constant currency terms and retail declined 7.7%. On the people front, Infosys added 4,480 employees on a net basis, taking total headcount to 3,32,542, while voluntary attrition improved to 12.7% from 14.3% a year ago. Addressing H-1B concerns, Parekh said the majority of US employees are local hires.
Dividend sweetens the message
To cushion the guidance cut, the board announced an interim dividend of Rs 26 per share, up 13% from last year, with a record date of November 3 and payout on November 11. Sanghrajka also highlighted free cash flow of $928 million, representing 113.3% of net profit.
What to watch next
The Infosys results set the tone for the rest of the Indian IT earnings season. The open question is whether the pricing pressure Sanghrajka described is Infosys-specific or industry-wide. With the December quarter seasonally soft, the 1-2% guidance suggests little help from demand for the rest of FY27.
For now, the stock’s pre-market fall shows that in this market, beating estimates is not enough. You have to convince investors the next quarter will be better too.
FAQs
Q1. What is the Infosys Q2 FY27 net profit?
Rs 7,823 crore, up 6.2% from Rs 7,364 crore in the same quarter last year.
Q2. Why did Infosys cut its FY27 revenue guidance?
A softer quarter, weak volumes, pricing pressure from intense competition, and clients demanding higher productivity in exchange for AI-led efficiencies. The full-year forecast moved to 1-2% from 1.5-3%.
Q3. What interim dividend did Infosys declare?
Rs 26 per share, up from Rs 23 last year, with a record date of November 3 and payout on November 11.
Q4. How much of Infosys’s revenue now comes from AI?
AI-related revenue accounted for 10.5% of total Q2 revenue and grew 29% sequentially.
Q5. How did the market react?
Infosys ADRs fell about 6% in pre-market trade to $12.40, as investors were disappointed by the deeper-than-expected guidance cut despite the quarter meeting estimates.
Stay tuned to Informeia for more updates on the Q2 earnings season.
