The American Depositary Receipts (ADRs) of Infosys crashed 7.5% in Friday’s trade on October 23, falling to $12.25 in pre-market trading after the Bengaluru-based technology firm trimmed its annual revenue growth forecast, despite marginally beating revenue estimates for the September quarter.
Infosys has revised its revenue growth forecast for the fiscal year ending March 2027 to 1%-2%, from its earlier estimate of 1.5%-3%. Most analysts had expected the company to lower the upper end of its guidance to 2.5%, bringing the range to 1.5%-2.5%.
The weaker outlook has heightened concerns that companies continue to curb spending on major information technology projects.
India’s second-largest IT services company, along with its peers, has struggled with a demand slowdown in recent years, driven by global uncertainty and exacerbated by the Middle East conflict and intensifying competition from companies such as Anthropic and OpenAI offer new ways to automate labor-intensive tasks that were previously outsourced to IT services providers.
Indian IT giants, however, maintain that their businesses remain agile and resilient. TCS’ earnings earlier this month pointed to a gradual improvement in contract flow, with the company’s annualised AI revenue reaching $3.1 billion.
Infosys Chairman Nandan Nilekani just last week shrugged off worries about AI eliminating jobs and said the technology will instead galvanize small businesses and fuel demand for new skills.
Infosys Q2 results: Net profit rises 6.2%
Infosys reported a 6.2% year-on-year increase in consolidated net profit to ₹7,823 crore for the September quarter, in results announced after market hours on Friday. The company had posted a net profit of ₹7,364 crore in the corresponding quarter last year.
Consolidated revenue from operations rose 10.2% year-on-year to ₹49,244 crore in the reported quarter, from ₹44,490 crore a year earlier.
AI-related revenue accounted for 10.5% of the company’s revenue and grew 29% quarter-on-quarter.
Infosys CEO and Managing Director Salil Parekh said the company secured large deals worth $5.2 billion during the quarter, including a mega deal valued at more than $2 billion.
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