Infosys cuts FY27 revenue guidance despite quarterly numbers in line with expectations

what happened

Infosys reported second-quarter revenue and profit broadly in line with analyst expectations, according to Moody's, which cites ET Intelligence Group. The company won a mega transformation deal worth $2 billion, lifting total contract value for the quarter to $5.2 billion, the highest since the September 2023 quarter, when it reached $7.7 billion. The EBIT margin stood at 21%, within the 20-22% guided band.

However, the company narrowed its FY27 revenue growth guidance to 1-2% from the previous 1.5-3%, below what analysts had expected. Management cited rising competitive intensity and weakness in some business verticals. The shares have risen about 16% over the past two weeks, and the results were released after market hours on Friday.

why it matters

The P/E multiple rose to 15.2 from about 13 two weeks earlier, but it remains well below the five-year average of above 21. According to the source, the weaker top-line outlook may keep valuation under pressure in the short term, so investors are likely to weigh management's commentary alongside the headline figures.

market impact

Infosys shares and the Indian IT sector: weaker revenue guidance puts pressure on valuations

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