Infosys Q2: FY27 Growth Guidance Cut to 1%-2%

Published: October 24, 2026 | Results for the quarter ended September 30, 2026

Infosys has lowered its full-year revenue-growth outlook after reporting modest underlying growth in the September quarter, even as deal bookings and AI-related revenue improved. The Bengaluru-based IT services company reported higher profit and held its operating-margin target steady, but the narrower growth forecast puts the focus on how quickly large contracts translate into billable work.

What Happened

In its October 23 results release, Infosys cut its FY27 revenue-growth guidance to 1%-2% in constant-currency terms, from the previous range of 1.5%-3%. It retained its operating-margin guidance at 20%-22%.

For Q2 FY27, revenue was $5.145 billion, up 1.5% year on year in constant currency. Revenue from operations in rupee terms was ₹49,244 crore, up about 10.7% year on year, while consolidated net profit rose 6.2% to ₹7,823 crore. These measures use different reporting bases, so the rupee growth rate should not be confused with constant-currency growth.

Large-deal total contract value reached $5.2 billion, with 62% classified as net new. Infosys also said AI revenue accounted for 10.5% of revenue and increased 29% sequentially. The board declared an interim dividend of ₹26 per equity share, with November 3, 2026 as the record date and November 11, 2026 as the payment date. The company’s official Q2 results page lists the financial statements and investor materials.

Why It Matters

Guidance is the clearest signal in the release: management now expects slower full-year growth than it had forecast previously. That matters because large IT-services contracts are usually delivered over time, and signed deal value does not immediately become recognised revenue. Investors will want evidence that bookings convert into work at a pace sufficient to offset softer discretionary technology spending.

The $5.2 billion deal total and rising AI contribution are constructive indicators, but they do not remove execution risk. The key questions are when new projects start, how much work is genuinely incremental, and whether AI-led productivity changes the pricing or staffing model for traditional services.

Market Impact

Infosys shares rose 0.3% to ₹1,154.50 during Friday’s regular session, according to MarketWatch’s October 23 market report. However, the results were released after the domestic market’s regular trading session, so that move should not be presented as a reaction to the lower guidance. At the time of this report, a verified post-announcement domestic share-price reaction was not established.

Industry Context

The results arrive during a cautious period for Indian IT services. Reuters reported on October 23 that AI is changing the industry’s commercial model as some clients increasingly connect fees to productivity outcomes rather than hours worked. That can create new demand for AI implementation while putting pressure on traditional labour-linked revenue. Infosys’s guidance therefore needs to be read alongside its deal pipeline, revenue conversion and margin discipline—not bookings alone.

For comparison, BusinessNews1 recently covered Cyient’s Q2 FY27 results, another example of investors weighing growth, profitability and shareholder returns across India’s technology-services sector.

What To Watch Next

Management commentary: Infosys scheduled its Q2 earnings conference call for 6:00 p.m. IST on October 23, according to the official results page. Watch for explanations of the guidance reduction, client demand and project ramp-ups.
Deal conversion: Track whether the $5.2 billion large-deal pipeline turns into revenue over coming quarters and how much is net new business.
AI monetisation: Watch whether AI revenue continues to grow and whether those projects add revenue and margin, rather than only improving delivery productivity.
Margins and hiring: The 20%-22% margin range remains unchanged. Future results will show whether investment in AI capabilities and delivery efficiency can support that target.

Frequently Asked Questions

Why did Infosys cut its FY27 revenue guidance?

Infosys reduced its FY27 revenue-growth guidance in constant-currency terms to 1%-2%, from 1.5%-3% previously. Constant currency strips out the effect of exchange-rate movements, making it a clearer measure of underlying business growth than rupee-reported revenue alone. The company kept its operating-margin outlook at 20%-22%.

How did Infosys perform in Q2 FY27?

For the July-September quarter, Infosys reported consolidated net profit of ₹7,823 crore, up about 6.2% year on year. Revenue from operations reached ₹49,244 crore, a rise of roughly 10.7% in rupee terms. Its constant-currency revenue growth was much lower at 1.5% year on year.

What dividend did Infosys declare?

Infosys’s board declared an interim dividend of ₹26 per equity share on October 23, 2026. The record date is November 3, 2026, and payment is scheduled for November 11, 2026, according to the company’s filing. A dividend declaration alone does not guarantee a particular share-price movement or investment return.

What does the $5.2 billion deal figure mean?

Infosys reported $5.2 billion in large-deal total contract value for the quarter, with 62% classified as net new. This indicates sizeable contract bookings, but deal value is not the same as revenue recognised in the quarter; conversion depends on implementation schedules, client spending and contract terms.