Infosys just did something that sounds contradictory. Its AI business grew by almost a third in three months, it signed one of its biggest deal hauls in years, and yet it told investors the full year will be slower than it promised. If you work in IT, are about to join as a fresher, or hold Infosys shares in your SIP, this one is worth five minutes.
On October 23, 2026, Bengaluru-based Infosys reported its July to September quarter (Q2 FY27) results and cut its revenue growth forecast for the year ending March 2027 to 1% to 2% in constant currency, down from the 1.5% to 3% it had guided earlier. The reasons it gave: clients squeezing prices, softer demand in retail and hi-tech, and customers asking that savings from AI be passed on to them.
Quick Facts
- Who: Infosys, India’s second-largest IT services company
- What: Cut FY27 revenue growth guidance to 1%–2% (constant currency); margin guidance kept at 20%–22%
- When: Q2 FY27 results announced October 23, 2026
- Where: Bengaluru, with the weakness showing most in North America
- Key numbers: Revenue $5.145 billion, net profit ₹7,823 crore (up 6.2%), AI now 10.5% of revenue, $5.2 billion in large deals
Infosys Q2 Results: The Numbers in Plain Words
The quarter itself was not bad. Revenue came in at $5.145 billion, up 1.2% from the previous quarter and 1.5% from a year ago in constant currency terms (that strips out the effect of the rupee and dollar moving around).
Net profit rose 6.2% year on year to ₹7,823 crore. Operating margin held at 21%, right in the middle of the company’s target band. Free cash flow was a healthy $928 million, and the board announced an interim dividend of ₹26 per share, about 13% more than last year’s ₹23.
So profits are fine. The worry is the top line. A company of 3.3 lakh people growing revenue at 1% to 2% a year is barely moving, and that is what the new forecast says.
Why Infosys Cut Its Revenue Forecast
CFO Jayesh Sanghrajka pinned the cut on a few things happening at once: pricing pressure, slower volume growth, and clients in retail and hi-tech holding back on discretionary projects. The hi-tech segment fell 17.3% year on year, which management linked largely to one US client. Retail dropped 7.7%.
Geography tells the same story. North America, Infosys’s biggest market, slipped 1.5% from a year ago. Europe did better, growing 4.6%. Sanghrajka also said a European manufacturing deal that Infosys declined, plus some offshoring effects, together shave roughly 1.8 to 2 percentage points off growth this year.
Then there is the AI twist. CEO Salil Parekh said clients now expect the productivity gains from AI to show up in their bills. In simple terms: if a coding assistant lets a team of ten do the work of seven, the client wants to pay for seven. Parekh called this pressure “a transitional element” of the bigger AI shift, and said Infosys is walking away from some deals that don’t meet its return targets.
The AI Revenue Puzzle at Indian IT Companies
Here is the strange part. AI revenue jumped more than 29% in a single quarter and now makes up 10.5% of Infosys’s total, up from 8.2% the quarter before. Management says this is net new business.
But AI is also eating into the older, bread-and-butter work: application maintenance, testing, routine coding. Those are exactly the jobs where AI tools make people faster, and faster means fewer billable hours. So Infosys is gaining on one side and losing on the other, and right now the losses are winning slightly.
That is the puzzle the whole Indian IT sector is trying to solve. Parekh did say he sees no pattern of clients pulling work back in-house because of AI, which is some comfort.
The Bright Spot: Big Deals for Next Year
Infosys signed 19 large deals worth $5.2 billion in total contract value this quarter, its second-highest in five years, with 62% of that being fresh business. One of them is a seven-year, $2 billion-plus contract with a large international company.
The catch is timing. That mega deal only starts ramping up late in the fourth quarter, so it barely helps this year. Parekh said it alone should add over 1% to growth in FY28. In other words, the company is asking investors to be patient for about a year.
Infosys Jobs and Fresher Hiring: What Changed
For job seekers, the news is better than the headline suggests. Infosys added over 4,400 employees on a net basis in the quarter, taking its headcount to about 3.32 lakh. It hired around 13,000 freshers in the first half and is sticking to its target of roughly 20,000 graduate hires for the full year.
Attrition also eased to 12.7% from 13%. Fewer people leaving usually means the job market in IT is not as hot as it was, but it also means stability for those already inside.
What We Don’t Know Yet
- How the share price will settle once markets fully digest the guidance cut next week.
- Whether rivals like TCS, Wipro and HCLTech will see the same AI pricing squeeze grow in coming quarters.
- Which client the $2 billion mega deal is with. Infosys has not named it.
What This Means for You
- If you’re a fresher with an offer: The 20,000 hiring target still stands, so onboarding plans look intact for now.
- If you work in IT services: Skills in AI tools, data and cloud are where the growth is. Routine maintenance and testing roles are under the most pressure.
- If you hold Infosys shares: The ₹26 dividend is up, cash is strong and the company is debt-free. The question is how long slow growth lasts. This is not investment advice; check with a registered advisor before acting.
Our Take
This is what the AI shift looks like from inside an Indian IT giant. The new work is real and growing fast, but it is not yet big enough to cover the old work it is shrinking. Infosys is being honest about that, which we respect. The next two quarters will show whether that $5.2 billion deal pipeline turns into real growth or just more patience.
FAQs
What is Infosys’s new revenue guidance for FY27?
Infosys now expects 1% to 2% revenue growth in constant currency for FY27, down from 1.5% to 3%. Its operating margin guidance of 20% to 22% is unchanged.
What was Infosys’s Q2 FY27 net profit?
Net profit was ₹7,823 crore, up 6.2% from the same quarter last year, on revenue of $5.145 billion.
How much dividend did Infosys announce?
The board declared an interim dividend of ₹26 per share, about 13% higher than last year’s interim payout.
Is Infosys still hiring freshers in 2026?
Yes. Infosys hired about 13,000 freshers in the first half of FY27 and has kept its target of around 20,000 graduate hires for the year.
How much of Infosys’s revenue comes from AI?
AI work made up 10.5% of revenue in Q2 FY27, up from 8.2% the previous quarter, after growing more than 29% in three months.
You can read the company’s official filings on the Infosys investor relations page.
Based on reporting by Dataquest, GuruFocus and Reuters.
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