Infosys lowers annual revenue growth forecast to 1 per cent to 2 per cent
The cut for the year ending March 2027 came even though quarterly revenue marginally beat estimates, helped by demand from energy and utility clients.
Infosys has lowered its forecast for how much its revenue will grow this financial year, according to CNA, which carried a Reuters report.
The company now expects revenue growth of 1 per cent to 2 per cent for the fiscal year ending March 2027. That compares with its earlier estimate of 1.5 per cent to 3 per cent. Most analysts had expected a smaller cut, with the upper end of the range trimmed to 2.5 per cent.
Quarterly revenue edged past estimates
The cut came even though quarterly revenue marginally beat estimates, helped by a pick-up in demand from energy and utility clients. In the July-September period, the company's revenue increased by 10.7 per cent, reaching 492.44 billion rupees ($5.19 billion). Analysts had forecast 491.32 billion rupees on average, based on LSEG data.
Excluding currency swings, the energy business, which is Infosys' third-largest contributor, saw revenue grow 7.3 per cent compared with the previous year. Overall revenue grew 1.5 per cent when the currency impact was excluded.
Profit missed, deal wins rose
Analysts, per LSEG data, had expected 79.29 billion rupees in net profit for the three months, but the figure came in at 78.23 billion rupees, a rise of 6.2 per cent. Deal wins came to $5.2 billion in the quarter, against $3.1 billion a year earlier.
AI pressure on the industry
India's $315 billion IT industry has been hurt by the spread of AI, which is pressing firms to rework how their businesses operate and to give steep discounts. AI is opening new revenue streams, but it is also challenging traditional revenue, as clients increasingly link fees to technology-led productivity gains rather than hours worked.
Peers Tata Consultancy Services and HCLTech both met revenue estimates earlier this week, and their shares surged as investors welcomed a rise in AI revenue. Infosys shares, listed in Mumbai, closed flat ahead of the results, while a basket of IT stocks fell 0.3 per cent.
