IT major Infosys reported a 12% year-on-year rise in consolidated net profit at Rs 7,769 crore for the quarter ended June. The company's revenue from operations rose 14% on year to Rs 48,211 crore. Infosys trimmed the upper end of its FY27 revenue growth guidance to 3% from 3.5%.
The company now expects revenue growth of 1.5-3% in constant currency terms for FY27, while retaining its operating margin guidance at 20-22%.
"We had a one-time impact... with a client decision. There are factors related to what is going on in the macro environment... The upper end of the guidance was really based on if the macro was improving. We now see the macro may improve but not at the level that we were thinking initially," CEO Salil Parekh said during the press conference.
In the first quarter, revenue from operations rose 3.9% sequentially. In constant currency terms, revenue grew 2.4% year-on-year and 1% sequentially.
Infosys said AI-led transformation continues to drive growth, with AI revenues accounting for 8.2% of total revenue during the quarter. The company also reported large deal wins worth $3.6 billion, of which 61% was net new business.
Operating margin stood at 21.1%, improving from 21% in the previous quarter and 20.8% in the year-ago period.
Parekh said AI is increasingly becoming a meaningful growth driver for the company.
"AI momentum is now rapidly converting into revenue, which demonstrates how Infosys' differentiated enterprise AI value proposition is translating into consistent market share gains," he said.
During the earnings press conference, Parekh said AI revenues have been growing at double-digit sequential rates over the past several quarters.
"We saw strong acceleration in our AI work... AI services revenue was 8.2% of overall revenue in Q1. This has been growing at double digit quarter-on-quarter for the last several quarters," he said.
Among industry verticals, life sciences recorded the strongest growth, rising 26.3% year-on-year in reported terms, followed by Europe-based healthcare-related demand supported by recent acquisitions. Financial services, the company's largest business segment, grew 2.9%, while communication increased 2.5% and hi-tech rose 1.5%. Manufacturing grew 1.7% despite the impact from a client-related issue flagged earlier.
Retail declined 1.5%, while the "others" segment fell 12.6%.
Management said financial services and energy, utilities, resources and services are expected to outperform the company average during the rest of the year, while retail and communication are likely to remain under pressure.
Geographically, Europe posted stronger reported growth of 4.8% year-on-year, while North America, which contributes more than half of Infosys' revenues, grew 2.7%. India revenues declined 12%, while the rest of the world grew 1.9%.
Infosys ended the quarter with a total employee count of 3,28,062, a decline of 532 employees from the previous quarter. Voluntary attrition in IT services stood at 13%, compared with 12.6% in the previous quarter.
The company said it continues to hire fresh graduates despite productivity gains from AI.
"This year, we have a plan to recruit 20,000 college graduates. We've already done over 4,000 in the first quarter. But equally, we see that there is a productivity benefit," Parekh said.