IT services company Infosys reduced its revenue growth guidance for FY2026-27 to 1-2% in constant currency terms, against 1.5-3% forecasted earlier, citing softer business volumes and pricing pressure amid competitive intensity and higher client productivity expectations.
“We expect even more uncertainty. Our Q2 has been softer, and our volume continues to remain softer,” Jayesh Sanghrajka, Chief Financial Officer, Infosys told during the Q2 press conference. “We have also seen pricing pressure on the back of competitive intensity and higher demand on productivity. So all that is baked in our revised guidance as we look forward.”
“On top of that, we are seeing softness in some of the sectors such as retail, high tech, where the discretionary is lower than what we were expecting,” Sanghrajka added.
The company reported a 6.2% year-on-year rise in consolidated net profit to Rs 7,823 crore for the second quarter ended September. Revenue rose 10.7% year-on-year to Rs 49,244 crore.
Infosys reported revenue growth of 1.5% year on year in constant currency terms during the quarter. Operating margin remained stable at 21%.
The company said its focus on cost and operational efficiency had helped maintain margins while making required investments.
“We delivered operating margins of 21.0% in Q2 amidst heightened volatility. Focus on cost and operational efficiency measures while making the required investments, have led to stable margins,” Sanghrajka said.
The company retained its operating margin guidance for FY27 at 20-22%.
Infosys said AI revenue accounted for 10.5% of total revenue in the quarter, rising 29% sequentially.
The company reported a large deal total contract value (TCV) of $5.2 billion during the quarter, with 62% of the deal value coming from net-new business. The wins included a mega deal worth more than $2 billion.
Infosys said it would continue to invest in domain and technology capabilities to help clients adopt AI at scale.
The board announced an interim dividend of Rs 26 per share.
Vertical play
In constant currency terms, Life Sciences led growth among the reported business segments, rising 32.5% year on year. Energy, Utilities, Resources and Services grew 7.3%, Communication grew 4.1%, and Financial Services grew 2.1%.
Manufacturing declined 0.7%, while Retail fell 7.7%. High-Tech recorded a decline of 17.3%, and the Others segment fell 4.7%.
Europe recorded year-on-year growth of 4.6% in constant currency terms, while the Rest of the World grew 10.9%.
North America, which accounted for 54.6% of revenue, declined 1.5%. Revenue from India fell 3.5%.
Infosys had 332,542 employees at the end of the quarter, an increase of 4,480 from the previous quarter. The company’s last-twelve-month attrition rate stood at 12.7%, compared with 13% in the previous quarter and 14.3% a year earlier.
The company hired 8,000 graduates during the quarter and said it was on track with its FY27 hiring plans of around 20,000 graduates, with more than half of the target completed in the first half of the financial year.
