Infosys Trims FY27 Revenue Growth Guidance to 1-2% Following Q2 Results

BENGALURU — Infosys has revised its annual revenue growth forecast downwards to 1-2% for the fiscal year ending March 2027, moving down from its earlier projection of 1.5-3%. The adjustment comes despite the company reporting a marginal beat on quarterly revenue estimates, driven by increased demand from energy and utility clients.

For the July-September period, revenue at India’s second-largest IT services provider rose 10.7 per cent to ₹49,244 crore ($5.19 billion). This performance slightly outperformed the average analyst estimate of ₹49,132 crore, according to data compiled by LSEG. Excluding currency fluctuations, overall revenue rose 1.5 per cent, while revenue from the energy business—the company's third-largest revenue contributor—increased by 7.3 per cent year-on-year.

Despite the positive quarterly revenue figures, the Bengaluru-based technology major reported a net profit of ₹7,823 crore, marking a 6.2 per cent increase. This figure fell below the ₹7,929 crore expected by analysts. Meanwhile, total deal wins for the quarter reached $5.2 billion, compared with $3.1 billion recorded in the same period a year ago.

The broader IT sector continues to navigate a shifting landscape marked by the rise of artificial intelligence. Industry participants note that AI is forcing companies to overhaul traditional business models and offer steep discounts. While AI has unlocked newer revenue streams, it presents challenges to traditional revenue structures as clients increasingly tie fees to technology-led productivity gains rather than hours worked.

Market reaction to the developments remained subdued. Infosys’ Mumbai-listed shares closed flat ahead of the results announcement, while a broader basket of IT stocks dropped by 0.3 per cent. Competitors Tata Consultancy Services and HCLTech met their revenue estimates earlier in the week, with investors responding positively to their AI-related revenue upticks.

"The decision by Infosys to lower its annual growth guidance despite beating quarterly estimates highlights the complex transition currently underway in the IT services sector. As clients shift toward productivity-linked pricing models driven by artificial intelligence, traditional revenue streams face sustained pressure. Technology firms must continue to adapt their service delivery models and manage margin expectations carefully as these structural shifts mature across the industry." — Dr. Shishir Gupta, Founder & CEO, StartupLanes