Infosys shares fall 4% after FY27 guidance cut

Infosys shares fell as much as 4% in early trade on Monday, 26 October, after the company cut its revenue growth forecast for the financial year 2026-27. Infosys shares touched an intraday low of Rs 1,107 on the National Stock Exchange, against a previous close of Rs 1,153.80. Infosys shares were trading around Rs 1,143 later in the morning session, down nearly 1%, and was among the top losers on the Nifty. The Nifty IT index was down 0.7% in early trade, and the benchmark Nifty 50 was also down 0.7%.

Infosys shares react to FY27 guidance cut

The company cut its FY27 revenue guidance to 1%-2% in constant currency from 1.5%-3%. Most analysts had expected Infosys to trim only the upper end of the range to 2.5%, so the deeper cut caught investors by surprise. The FY27 revenue guidance was announced after market hours on Friday, 23 October, along with the September quarter results. Infosys shares listed in the United States had already fallen on Friday, with the American depositary shares closing down 6.58% at $12.35, after trading between $12.21 and $12.69. Trading volume in the depositary shares reached about 45.96 million, against 38.24 million the previous session.

Infosys shares weighed down by September quarter results

For the quarter ended 30 September, Infosys reported a 6.2% rise in consolidated net profit to Rs 7,823 crore, up from Rs 7,364 crore a year earlier. Revenue from operations rose to Rs 49,244 crore, and the operating margin stood at 21.0%. In dollar terms, revenue was $5.145 billion, up 1.3% on a reported basis and 1.5% in constant currency. Basic earnings per share were 20 cents, down 0.3% from a year earlier, and free cash flow was $928 million, down 15.7% year on year. Large deal bookings totalled $5.2 billion in the quarter, with 62% classed as net new business, including one contract worth more than $2 billion. Revenue from artificial intelligence services grew 29% from the previous quarter and now accounts for 10.5% of total revenue. Chief executive Salil Parekh pointed to the AI growth and the large deal wins. Chief financial officer Jayesh Sanghrajka said the company delivered an operating margin of 21.0% in the quarter despite heightened volatility, and credited cost and efficiency measures.

Infosys shares face pricing pressure in North America

North America revenue fell 1.5%, its weakest performance in two years, according to Reuters. North America revenue brings in more than half of the company's sales. Management blamed softer volumes, pricing pressure from competition and client demands to share productivity gains from AI. Technology and retail customers in North America cut back on projects. The Nifty IT index stayed lower through the morning as investors weighed the guidance cut. Systematix called it a disappointing quarter and cut its fair value estimate to Rs 1,150 from Rs 1,200. Motilal Oswal said weaker volumes, smaller price increases, a shift toward offshore delivery and the exit from a large European manufacturing contract had weighed on growth. TD Cowen said macroeconomic uncertainty, AI-led productivity demands and competition had hurt pricing and volumes, and warned that seasonal weakness and client ramp-downs could weigh on second half growth. Infosys was the last of the top five Indian IT firms to report September quarter results, after Tata Consultancy Services and HCLTech met revenue estimates earlier in the month. The quarter's results left investors waiting to see whether deal wins and AI services can offset client caution in the second half.