Bengaluru: Infosys reported a soft quarter on Friday evening. By Monday morning, the market had made its view clear.
The stock fell as much as 3.9% in early trade to Rs 1,109.70 on the BSE, and was still down about 1.5% at Rs 1,136 by late morning. Infosys is now down more than 30% this year, against a 13.5% fall in the Nifty 50, with a market capitalisation of roughly Rs 4.6 lakh crore.
The trigger was the guidance. Infosys cut its FY27 constant-currency revenue growth forecast to 1-2%, from 1.5-3%, and its organic growth guidance to -0.5% to 0.5%. Most analysts had expected it to trim only the upper end. It is the second consecutive quarter of a cut, and the EBIT margin guidance of 20-22% is unchanged.
For the September quarter, consolidated net profit rose 6.2% year-on-year to Rs 7,823 crore and revenue came in at Rs 49,244 crore. Constant-currency revenue grew 1.2% sequentially, below estimates, and EBIT margin slipped 10 basis points to 21%. Earnings per share were Rs 19.3.
"Our Q2 has been softer and our volume continues to remain softer. We have also seen pricing pressure on the back of competitive intensity and higher ask on productivity," Chief Financial Officer Jayesh Sanghrajka said. He also flagged softness in retail and high tech, where discretionary spending came in lower than expected.
There was one clear bright spot. Infosys won 19 large deals in the quarter, taking large-deal total contract value to $5.2 billion, up 44% sequentially and 68% year-on-year, with 62% net new. That includes a seven-year deal worth over $2 billion with a financial services client, whose transition begins late in the fourth quarter, and a $1 billion mega renewal. AI revenue rose to 10.5% of total revenue from 8.2% in the previous quarter.
Brokerages were split. UBS kept a Buy with a target of Rs 1,415. HSBC stayed on Hold with Rs 1,110 and warned of margin pressure from wage hikes in the second half. Goldman Sachs kept Neutral at Rs 1,000, noting the midpoint of the new guidance implies modestly negative organic growth for the year. Motilal Oswal retained Buy with Rs 1,300.
"Peers are better placed than Infosys at this point, and the share movement is just reflecting that. Infosys has been underperforming from Q4FY26 results," LKP Securities analyst Anshul Jethi said.
Systematix called it a disappointing quarter and pointed to structure: "Infosys has the highest exposure to application services among tier-1 Indian IT companies, a service line structurally more vulnerable to AI-driven deflation."
Infosys was the last of the big five to report. TCS and HCLTech had met revenue estimates earlier this month, with HCLTech raising its guidance.