Infosys shares saw a significant decline after the IT major announced its Q4 earnings and provided a revenue growth forecast for FY27 that fell short of market expectations, impacting investor sentiment.
Photograph: Chris Helgren/Reuters
Key Points
- Infosys shares dropped nearly 4 per cent, hitting a 52-week low, following its Q4 earnings announcement.
- The company’s revenue growth forecast for FY27 is 1.5-3.5 per cent, which is below market expectations.
- Infosys reported a 20.8 per cent rise in consolidated net profit to Rs 8,501 crore for the January-March quarter.
- The top management cited momentum in financial services, utilities, and AI services, despite a ‘change in economic environment’ due to the West Asia conflict.
- Analysts suggest that AI adoption might be compressing the existing book of business, contributing to the conservative guidance.
Shares of IT major Infosys on Friday dropped nearly 4 per cent after its revenue growth forecast for FY27 came in lower than market expectations.
The stock declined 3.91 per cent to hit a 52-week low of Rs 1,193.90 on the BSE.
At the NSE, the stock dropped 3.75 per cent to Rs 1,194.
The company’s market valuation declined by Rs 19,503.61 crore to Rs 4,84,728.11 crore.
Infosys Q4 Results Beat Expectations but Market Remains Unimpressed
As per a report by JM Financial Institutional Securities Limited, Infosys reported 4QFY26 results — revenue and margins were below expectations.
“Forward-looking indicators — Infosys guided for 1.5 per cent-3.5 per cent YoY cc revenue growth for FY27 (includes 20-25bps of acquisition), lower than our expectation of 2 per cent to 4 per cent, margin guidance was in-line at 20-22 per cent,” it said.
Infosys on Thursday reported a 20.8 per cent rise in consolidated net profit to Rs 8,501 crore in the January-March quarter and guided for 1.5 to 3.5 per cent revenue growth for FY27, pinning its optimism on momentum in financial services, utilities, and AI services.
The top management spoke of the calendar year starting on a strong note, but pointed out that there was a “change in economic environment” amid the West Asia conflict, though things appear to be stabilising now.
Financial Highlights and CEO’s Commentary
The company’s revenue from operations increased 13.4 per cent to Rs 46,402 crore in Q4 FY26 compared to Rs 40,925 crore in the year-ago period.
In the full 2025-26 fiscal year, Infosys’ net profit climbed 10.20 per cent to Rs 29,440 crore from Rs 26,713 crore in 2024-25.
Its revenue from operations in FY26 rose 9.6 per cent to Rs 1,78,650 crore.
For FY27, Infosys has given a revenue growth forecast of 1.5 to 3.5 per cent in constant currency terms.
“We had strong growth in financial services, in communications, and in manufacturing from the industry side and in Europe from the geography side.
“As we look ahead to the financial year 2027, we see large opportunities in AI services.
“We expect acceleration of growth in financial services and in the energy, utility, resources and services vertical.
“With the Iran war, there was a change in the economic environment…(but) there seem to be paths towards things stabilising.
“What we understand, (through) talking to people in the market and the clients, is that the underlying resilience of some of the economies where we have big markets is pretty good.
“The economies are doing well.
“There are good investments. AI is growing well,” Infosys CEO and MD Salil Parekh said.
FY27 Guidance: The Key Concern for Investors
“Guidance for FY27 is maintained at 1.5-3.5 per cent YoY cc (vs. our expectation of 1.5-4.5 per cent YoY cc),” according to Motilal Oswal Financial Services.
Infosys guidance of 1.5–3.5 per cent is below our estimates at the top end, and it tells us that AI is now compressing the existing book of business, it added.
