Infosys Q2 Results: Profit Rises 6.2% to ₹7,823 Crore; FY27 Guidance Cut

Infosys posted a 6.2% year-on-year rise in net profit to ₹7,823 crore for the July–September quarter on Friday, and cut its FY27 revenue growth guidance to 1–2% in constant currency.

The Infosys Q2 results were mixed against Street estimates. Revenue rose 10.7% to ₹49,244 crore from ₹44,490 crore a year earlier, ahead of a Bloomberg analyst poll of ₹49,108 crore. Profit, however, fell short of the poll estimate of ₹7,904 crore, Business Standard reported.

In dollar terms, revenue came in at $5,145 million, up 1.3% from the previous year. Constant-currency revenue grew 1.5% year-on-year and 1.2% sequentially, the weakest growth in at least six quarters, as volumes remained soft.

Infosys revenue guidance lowered to 1–2%

The Bengaluru-headquartered company lowered its full-year constant-currency growth estimate to 1–2%, from the 1.5–3% range it had given just three months ago. It retained its operating margin guidance of 20–22%.

Management cited slower growth in the US, weaker discretionary spending by clients and softness in some industries. It also flagged deflationary pressure from artificial intelligence and expects the second half of the year to be harder than the first.

“It was a soft quarter for us,” Chief Executive Officer Salil Parekh said, adding that volumes were lower and AI was also compressing prices. Chief Financial Officer Jayesh Sanghrajka said wage hikes and continued pricing pressure would weigh on the second half.

Operating margin stayed at 21.0%, unchanged from a year ago and slightly lower than 21.1% in the June quarter. Gains from currency movements and extra working days were offset by acquisition-related costs.

Large deals and AI revenue offer support

Big-ticket contracts were a bright spot. The total value of large deals rose to $5.2 billion from $3.6 billion in the previous quarter, including one mega deal worth more than $2 billion. Net new business made up about 62% of that value.

Revenue from AI-related work grew 29% sequentially and accounted for 10.5% of total revenue, up from about 8.2% in the June quarter. Benefits from the large deals are expected to start flowing in from April.

Infosys declared an interim dividend of ₹26 per share, up from ₹23 a year earlier. Headcount stood at 332,542 at the end of September after a net addition of 4,480 employees, while voluntary attrition was 12.7%.

Free cash flow for the quarter stood at $928 million, down 15.7% year-on-year, according to IndMoney. That still worked out to roughly 113% of net profit, indicating healthy cash conversion.

Segment trends were uneven. Financial services grew 2.1% and energy, utilities and resources rose 7.3%, but retail fell 7.7% and hi-tech declined 17.3%. Revenue from North America dropped 1.5%, while Europe grew 4.6%.

Why the Infosys Q2 results matter for Indian IT

Infosys is one of India’s largest IT services exporters, and its outlook is read as a signal of technology spending by global clients. A second guidance cut this fiscal suggests that clients remain cautious despite healthy deal signings.

Peers have shown a similar trend. Wipro reported 0.6% constant-currency growth for the quarter, while engineering services firm Tata Elxsi reported a 10% rise in Q2 profit earlier this month.

The company’s US-listed shares fell about 6.4% in pre-market trade after the announcement. Investors will watch how the stock trades on the NSE and BSE on Monday, given that the guidance reset came with a profit miss.

Analysts remain wary. Manav Medewala of Mirae Asset Sharekhan cautioned that growth driven by acquisitions, without a recovery in the core business, could lead to a lower valuation multiple for the stock.

After the Infosys Q2 results, investors will track whether the large deals ramp up on schedule, how AI-led pricing pressure affects revenue and how the company absorbs wage hikes in the second half. The company’s filings are available on the Infosys investor relations page, and more earnings coverage is on our business news section.