Infosys Q2 results: IT major's ADR falls 6% after it lowers annual revenue growth guidance

In the quarterly earnings report released today, Infosys revised its revenue growth guidance for the fiscal year ending ⁠March 2027 to 1-2 percent in constant currency terms, compared with its earlier forecast of 1.5-3 percent. The company maintained its operating margin guidance. Most analysts had expected the company to downgrade the upper-end of the ​range to 1.5 percent to 2.5 percent. In the June quarter too, Infosys had narrowed its full-year revenue growth guidance to 1.5-3 percent from 1.5-3.5 percent, citing macroeconomic uncertainty and its assessment of demand for the remainder of the financial year.

Jayesh Sanghrajka, CFO of Infosys, said, "We are seeing pricing pressures on intense competition and customers asking for higher productivity. That's reflecting in our revised guidance." The rise of AI has hurt India's $315 billion IT industry, forcing companies to overhaul their business models and offer steep discounts. Despite AI ​unlocking newer revenue streams, it is challenging the traditional revenue as ​clients are increasingly tying fees to technology-led productivity gains instead of hours worked.

Peers Tata ‌Consultancy ⁠Services and HCL Technologies both met their revenue estimates earlier this week, but their investors cheered AI revenue uptick with their stocks surging. Infosys Q2FY27 results The Bengaluru-based tech major's reported a 6.2 percent increase in its consolidated net profit to Rs 7,823 crore for the second quarter ended September 30. The company posted a net profit of Rs 7,364 crore in the year-ago period. The consolidated revenue from operations grew 10.2 per cent to Rs 49,244 crore in the reported quarter from Rs 44,490 crore a year ago.