Overview:
Infosys net profit rose 6.2% to Rs. 7,823 crore, while revenue increased 10.7%.
AI revenue surged 29% sequentially, contributing 10.5% of Infosys' total quarterly revenue.
Infosys revised FY27 revenue growth guidance to 1%-2%, retaining operating margin guidance at 20%-22%.
Infosys reported a 6.2% year-on-year increase in consolidated net profit to Rs. 7,823 crore for the second quarter of FY27, while revenue rose 10.7% to Rs. 49,244 crore. The Bengaluru-based IT services company maintained its operating margin at 21.0% and reported a 29% quarter-on-quarter increase in AI revenue, which accounted for 10.5% of total revenue.
Announcing its results on October 23, 2026, Infosys said revenue grew 1.5% year-on-year and 1.2% sequentially in constant currency terms. However, the company revised its FY27 revenue growth guidance to 1%-2% in constant currency, while retaining its operating margin guidance of 20%-22%.
The results reflect a business balancing increased demand for AI-led transformation projects with uneven growth across industries and regions.
Infosys Q2 FY27 Financial Results: Revenue and Profit
For the quarter ended September 30, 2026, Infosys recorded consolidated revenue of Rs. 49,244 crore, compared with Rs. 44,490 crore in the corresponding quarter last year and Rs. 48,211 crore in the June 2026 quarter.
Operating profit increased 10.4% year-on-year to Rs. 10,330 crore from Rs. 9,353 crore. Operating margin remained unchanged at 21.0% year-on-year, although it was marginally lower than 21.1% in the preceding quarter.
Gross profit stood at Rs. 15,301 crore, up 11.8% from Rs. 13,690 crore a year earlier. Total operating expenses rose 14.6% to Rs. 4,971 crore, with selling and marketing expenses up 11.9% to Rs. 2,489 crore and administrative expenses up 17.5% to Rs. 2,482 crore.
Profit before income taxes rose 8.2% year-on-year to Rs. 11,063 crore. Income tax expense increased 13.0% to Rs. 3,225 crore, while other income, net of finance cost, declined 16.3% to Rs. 733 crore.
Net profit after non-controlling interests rose to Rs. 7,823 crore, up from Rs. 7,364 crore in the year-ago quarter and Rs. 7,769 crore in the previous quarter. Basic earnings per share increased 8.7% year-on-year to Rs. 19.32, while diluted earnings per share rose 8.8% to Rs. 19.30.
In dollar terms, revenue stood at USD 5,145 million, up 1.3% year-on-year and 1.2% quarter-on-quarter in reported currency. Net profit was USD 817 million, down 2.5% year-on-year, highlighting the difference between reported dollar growth and rupee-denominated results.
AI Revenue Grows 29%, Large Deals Reach USD 5.2 Billion
AI-led services drove key growth during the quarter. Infosys said AI accounted for 10.5% of revenue, with AI revenue increasing 29% sequentially. Chief Executive Officer and Managing Director Salil Parekh said the company secured large deals totaling USD 5.2 billion in contract value (TCV), including a mega deal worth more than USD 2 billion. Of the overall large-deal TCV, 62% was net new business.
Parekh said the deal pipeline reinforced Infosys' position as a partner for large and complex enterprise transformation programs. He added that the company was advising major global enterprises on AI strategy and investing in domain expertise, technology capabilities and its partner ecosystem.
The company also reported several client engagements involving AI-enabled business processes, cloud migration, cybersecurity and enterprise technology modernization. These included an AI-enabled supply chain transformation with Mondelez International, a ten-year IT transformation agreement with Crocs, Inc., and AI-enabled enterprise transformation work with Knorr-Bremse. Infosys also expanded its AI-led IT transformation collaboration with Metsä Group.
Other engagements included SAP Commerce Cloud adoption for NTN Corporation; AI-powered network and cybersecurity transformation for Telia; an AI-powered customer engagement platform for KnitWell Group; and Investec's digital banking transformation through Infosys Finacle's software-as-a-service platform on Microsoft Azure.
Infosys Revises FY27 Revenue Guidance
Infosys has revised its FY27 revenue growth guidance to 1%-2% in constant currency terms. Its operating margin guidance remains unchanged at 20%-22%. For the first half of FY27, revenue increased 12.3% year-on-year to Rs. 97,454 crore. Constant currency growth stood at 1.9%, while operating margin remained at 21.0%.
Basic earnings per share rose 11.7% to Rs. 38.51 for the six months. Net profit rose 9.1% to Rs. 15,592 crore, up from Rs. 14,285 crore in the corresponding period last year.
Chief Financial Officer Jayesh Sanghrajka said cost management and operational efficiency measures, alongside necessary investments, helped the company maintain its operating margin amid heightened volatility.
Free cash flow for the quarter stood at Rs. 8,898 crore, down 8.1% year-on-year. It represented 113.5% of net profit. In the first half, free cash flow rose 4.3% to Rs. 17,949 crore, converting at 115.0% of net profit.
In dollar terms, quarterly free cash flow was USD 928 million, down 15.7% year-on-year, while first-half free cash flow was USD 1,883 million, down 5.1%. The company's board announced an interim dividend of Rs. 26 per share, up 13% from Rs. 23 per share last year.
Life Sciences Leads Sector Growth; Hi-Tech and Retail Decline
Infosys' segment data showed significant performance differences across industries.
Life Sciences recorded the strongest year-on-year growth, at 32.5% in both reported and constant currency terms. Energy, Utilities, Resources & Services grew 7.4% in reported currency and 7.3% in constant currency, while Communication increased 4.4% and 4.1%, respectively.
Financial Services, the company's largest business segment at 28.0% of revenue, grew 2.3% in reported currency and 2.1% in constant currency. Manufacturing declined 1.4% in reported currency and 0.7% in constant currency. Retail fell 8.1% and 7.7%, respectively, while Hi-Tech registered the sharpest decline, at 17.5% in reported currency and 17.3% in constant currency.
By geography, North America contributed 54.6% of revenue but declined 1.6% in reported currency and 1.5% in constant currency. Europe, accounting for 32.5% of revenue, grew 3.9% in reported currency and 4.6% in constant currency.
The Rest of the World grew 15.1% in reported currency and 10.9% in constant currency. India, which contributed 2.8% of revenue, declined 10.5% in reported currency and 3.5% in constant currency.
Workforce, Client Base and Cash Position
Infosys had 332,542 employees as of September 30, 2026, compared with 328,062 at the end of June. Software professionals accounted for 314,508 employees, while sales and support staff numbered 18,034.
Voluntary attrition in IT services, measured over the last twelve months, declined to 12.7% from 14.3% a year earlier. Women accounted for 39.8% of employees, compared with 39.5% in September 2025.
The company reported 2,060 active clients, up from 1,896 a year earlier, and added 142 clients during the quarter on a gross basis. Its client base included 1,048 clients generating more than USD 1 million in revenue, 322 generating more than USD 10 million, 87 generating more than USD 50 million, and 42 generating more than USD 100 million.
Consolidated cash and investments stood at Rs. 45,232 crore on September 30, 2026, compared with Rs. 37,065 crore at the end of June and Rs. 54,809 crore a year earlier.
The company's balance sheet reported total assets of Rs. 1,63,480 crore, against Rs. 1,55,967 crore on March 31, 2026. Total liabilities stood at Rs. 63,937 crore, while total equity reached Rs. 99,543 crore.
Infosys' second-quarter performance therefore combines steady operating margins, stronger rupee-denominated profit and rising AI revenue with modest constant currency growth and pressure in select sectors. Its revised revenue outlook and the composition of its large-deal pipeline will remain important indicators of business momentum through the second half of FY27.