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Infosys trims FY27 growth outlook

NEWS

October 23, 2026 at 11:15 UTC

2 min read
Open-plan IT services office floor symbolizing INFY revenue growth guidance cut and steady margins

Key Points

  • 01Infosys (INFY) cut its FY27 constant-currency revenue growth guidance to 1%-2%
  • 02Q2 FY27 revenue rose 1.5% YoY in constant currency to $5.145 billion
  • 03Operating margin held at 21.0% and full-year margin guidance stayed at 20%-22%
  • 04Large deal TCV reached $5.2 billion in Q2, with 62% from net new business

Infosys lowers FY27 revenue growth guidance

Infosys revised its full-year FY27 revenue growth guidance to 1%-2% in constant currency, signaling a more cautious outlook for the year. At the same time, the company maintained its FY27 operating margin guidance in the 20%-22% range. The change in revenue guidance reflects expectations for more modest growth while aiming to preserve profitability levels.

In rupee terms, Infosys sees FY27 revenue growth of 1.0%-2.0%, compared with an external expectation of 2.0%. The operating margin view between 20.0% and 22.0% is unchanged and compares with a market expectation of 20.8%. This combination highlights softer revenue ambitions but a steady margin framework.

Q2 FY27 topline and profitability performance

For Q2 FY27, Infosys reported revenues of $5.145 billion, representing a 1.5% year-on-year increase and 1.2% sequential growth in constant currency. Reported revenues were ₹49,244 crore, a 10.7% year-on-year rise and 2.1% growth compared with the June quarter, broadly in line with analyst expectations of ₹49,194 crore.

Operating performance remained stable, with an operating margin of 21.0% in the quarter. EBIT was ₹10,330 crore, up 1.6% sequentially, while the margin was around 21%. Basic earnings per share stood at ₹19.32, an 8.7% year-on-year increase, indicating earnings growth ahead of topline expansion.

Deal wins, cash generation and demand backdrop

Infosys secured large deal total contract value of $5.2 billion in Q2 FY27, with 62% of this classified as net new business. The company described this as including a mega deal of over $2 billion, reinforcing its role in large and complex transformation programs. These wins are positioned around AI-first transformation and broader technology modernization initiatives.

Free cash flow for the quarter was ₹8,898 crore, representing a free cash flow conversion of 113.5% of net profit. While free cash flow declined 8.1% year on year, the conversion rate indicates strong cash generation relative to earnings. This financial position supports the company’s ability to invest in growth and sustain shareholder returns.

Market reaction and recent share performance

Infosys shares ended little changed at ₹1,153.8 on the day of the results, after opening higher.

Key Takeaways

  • 01Infosys (INFY) now anticipates only low single-digit constant-currency revenue growth for FY27, signalling a more tempered demand environment.
  • 02Despite cutting its growth outlook, Infosys (INFY) is holding firm on its 20%-22% operating margin target, underscoring a focus on profitability discipline.
  • 03Robust large deal wins and strong cash conversion provide some support to the outlook even as topline expectations are dialed back.

References

  1. https://www.cnbctv18.com/market/infosys-q2-results-fy27-guidance-revenue-margin-deal-wins-ai-deflation-adr-share-price-20018067.htm
  2. https://www.bloomberg.com/news/articles/2026-10-23/infosys-lowers-sales-forecast-after-companies-curb-it-spending
  3. https://www.investywise.com/infosys-q2-fy27-financial-results-dividend-declaration
  4. https://www.newsquawk.com/headlines/infosys-infy-q2-2026-inr-net-profit-782bln-exp-793bln--revenue-4924bln-exp-4913bln-lowers-fy27-revenue-view