Infosys found $5.2 billion of large deals and grew its AI business by nearly a third in a single quarter. Investors still sold the stock on Monday. The reason comes down to one number: the company now expects to grow less this year than it said three months ago.
India’s second-largest IT services company reported its July-September (Q2 FY27) results on Friday, October 23. Net profit rose 6.2% year-on-year to ₹7,823 crore, but Infosys cut its full-year revenue growth forecast to 1-2% in constant currency, down from 1.5-3% earlier. On Monday, October 26, its shares fell as much as 4% in early trade on the NSE before recovering most of the loss.
Quick Facts
- Who: Infosys, led by CEO Salil Parekh and CFO Jayesh Sanghrajka
- What: Q2 FY27 results plus a cut in FY27 revenue growth guidance
- When: Results on Friday, October 23, 2026; share reaction on Monday, October 26
- Net profit: ₹7,823 crore, up 6.2% year-on-year
- Revenue: ₹49,244 crore, or $5,145 million
- New FY27 guidance: 1-2% constant currency growth (was 1.5-3%)
- Interim dividend: ₹26 per share, up from ₹20.25
Infosys Q2 Results: The Numbers
On paper, this was not a bad quarter. Revenue came in at ₹49,244 crore, according to the Free Press Journal, up 10.7%. In dollar terms that is $5,145 million.
The figure that matters most to IT watchers is constant currency growth, which strips out swings in the rupee and other currencies. On that measure, Infosys grew 1.5% from a year ago and 1.2% from the previous quarter. Slow, but still growth.
Operating profit stood at ₹10,330 crore, up 10.4%, though reports said this was below what the market expected. The operating margin held at 21%. Free cash flow for the quarter was $922 million.
Why Infosys Cut Its Revenue Guidance
Guidance is the company’s own forecast for the full financial year, and markets watch it more closely than any single quarter. Infosys had already trimmed the top end of the range after its June-quarter results. Now it has lowered the whole band to 1-2%.
On the earnings call, management pointed to several pressures, according to a transcript published by Investing.com:
- Softer business volumes from clients
- Pricing pressure from rivals
- Clients asking for productivity gains, meaning more work for the same money
- Weakness in retail and high-tech clients
- A European manufacturing deal that Infosys chose to walk away from because it did not meet its return targets
Management also admitted something the whole industry is wrestling with. AI tools are making some traditional work, the kind that used to be billed by the hour, faster to do. That means some of that revenue is shrinking.
The operating margin forecast stays unchanged at 20-22%. The CFO did flag salary costs and pricing pressure as headwinds for the second half of the year.
The Bright Spots: AI Revenue and Mega Deals
If you are looking for good news, there is some. AI-related revenue grew 29% from the previous quarter and now makes up 10.5% of total revenue, up from 8.2% in the June quarter.
“AI revenue was a standout,” Parekh said on the call.
Large deal wins totalled $5.2 billion, and 62% of that was net-new business rather than renewals. Two mega deals stood out: a new contract worth over $2 billion spread across seven years, and a $1 billion renewal. Management said the big new deal should add more than 1% to revenue growth next financial year, which helps explain why it was not enough to lift this year’s outlook.
Infosys Share Price Reaction
The stock fell as much as 4% in early Monday trade, then recovered to around ₹1,140 on the NSE, about 1% lower, as per the Free Press Journal. The Nifty IT index was down only 0.16%.
The bigger picture is tougher. Infosys shares are down about 30% so far this year, compared with a 13.5% fall in the Nifty 50. Its market value is roughly ₹4.6 lakh crore. Infosys ADRs in the US also slid in pre-market trade after the results.
What It Means for IT Jobs and Freshers
For lakhs of engineering students and IT employees across Bengaluru, Pune, Hyderabad and Chennai, the hiring numbers may be the most important part of the update.
Infosys added a net 4,000 employees in the quarter and hired 8,000 freshers. It said it still plans to bring in about 20,000 freshers over the full year. Attrition was in the 12-13% range.
So despite the gloomy forecast, the company is still hiring. The open question is whether slow growth and AI-driven productivity will squeeze salary hikes and lateral hiring in the months ahead.
What We Don’t Know Yet
- The record date and payment date for the ₹26 interim dividend were not confirmed in the reports we reviewed. Check the company’s exchange filing.
- The client behind the $2 billion seven-year deal has not been named in the coverage we read.
- Whether salary hikes for this year will be affected was not addressed in the reports we reviewed.
What This Means for You
- Shareholders: The interim dividend of ₹26 per share goes to those holding shares on the record date. Watch Infosys’s filing on NSE or BSE for the exact date.
- Job seekers: Fresher hiring is continuing, and AI skills are clearly where the company is growing fastest.
- Investors: This article is for information only and is not a buy or sell recommendation. Speak to a registered financial adviser before acting.
Our Take
Infosys is caught between two stories. One is a fast-growing AI business and a healthy deal pipeline. The other is a core services business where clients want more for less, partly because of the same AI. Right now the market is listening to the second story. The next two quarters will show whether those mega deals start to change the tune.
FAQs
What is Infosys’s Q2 FY27 net profit?
Infosys reported a net profit of ₹7,823 crore for the July-September quarter, up 6.2% year-on-year.
What is Infosys’s new revenue guidance for FY27?
Infosys now expects 1-2% revenue growth in constant currency for FY27, down from 1.5-3% earlier. Operating margin guidance stays at 20-22%.
How much dividend has Infosys announced?
The board announced an interim dividend of ₹26 per share, up from ₹20.25 a year ago.
Why did Infosys shares fall today?
Shares fell as much as 4% on Monday mainly because of the guidance cut and an operating profit below expectations, before recovering to trade about 1% lower.
Is Infosys still hiring freshers?
Yes. It hired 8,000 freshers in Q2 and said it plans to hire about 20,000 freshers this financial year.
For the official results and filings, see the Infosys investor relations page.
Based on reporting by the Free Press Journal, Investing.com and Outlook Business.
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