Infosys Cuts Revenue Outlook as North American Demand Weakens

what happened

According to Moody's, Infosys reduced its constant-currency revenue growth forecast for fiscal 2027 to 1-2%, down from the previous 1.5-3%. The main reason is weakness in North America, which generates more than half of the company's sales. Revenue from the region fell 1.5% in the September quarter, its weakest showing in two years.

Net profit for the quarter rose 6.2% to Rs 7,823 crore but came in below analyst estimates. Rupee revenue grew 10.7% to Rs 49,244 crore, operating margin held at 21%, and the 20-22% margin guidance was kept. US-listed shares dropped 7.5% in premarket trading.

Large-deal wins reached $5.2 billion, up from $3.1 billion a year earlier, and 62% of that value was new business. Those contracts will convert into revenue gradually. AI-related work accounted for 10.5% of revenue and grew 29% from the previous quarter.

why it matters

For markets, the gap between contract bookings and recognised revenue matters most: until those orders turn into revenue, they do not change the growth outlook. Pricing pressure and clients seeking productivity gains from AI, according to the CFO, also limit growth and remain a drag on the sector.

market impact

Infosys (INFY) and Indian IT services: weak growth guidance pressures the company's shares

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