Infosys has cut its revenue growth guidance for the financial year 2026-27 to 1-2% in constant currency, while retaining its operating margin guidance at 20-22%, after reporting muted revenue growth in the September quarter.
The IT services company reported consolidated revenue of ₹49,244 crore in the second quarter, up 10.7% year-on-year in rupee terms. In constant currency, revenue grew 1.5% year-on-year and 1.2% sequentially.
Net profit rose 0.7% sequentially to ₹7,823 crore from ₹7,769 crore.
For the first half of FY27, revenue grew 12.3% year-on-year to ₹97,454 crore in rupee terms and 1.9% in constant currency. Operating margin stood at 21%.
AI revenue rises 29%; large deals at $5.2 billion
Infosys said revenue from artificial intelligence (AI) contributed 10.5% of total revenue in the September quarter, growing 29% sequentially.
The company reported large-deal total contract value (TCV) of $5.2 billion, of which 62% was net new. The deal wins included a mega deal worth more than $2 billion.
“Our AI revenue was at 10.5% and grew 29% quarter-on-quarter,” CEO and managing director Salil Parekh said, adding that the company was advising large global enterprises on AI strategy and investing in domain and technology capabilities.
Growth across business segments remained uneven. Life Sciences revenue grew 32.5% year-on-year in constant currency, while Energy, Utilities, Resources and Services grew 7.3%. Communication rose 4.1% and Financial Services increased 2.1%.
However, Hi-Tech revenue declined 17.3% in constant currency, while Retail fell 7.7%. Manufacturing revenue slipped 0.7%.
North America, which accounted for 54.6% of revenue, declined 1.5% year-on-year in constant currency. Europe grew 4.6%, while revenue from the rest of the world increased 10.9%.
Free cash flow declines; dividend raised
Free cash flow stood at ₹8,898 crore in the September quarter, down 8.1% year-on-year. It represented 113.5% of net profit, according to the company's fact sheet. For the first half, free cash flow rose 4.3% to ₹17,949 crore.
Infosys' consolidated cash and investments stood at ₹45,232 crore at the end of September, compared with ₹37,065 crore at the end of June.
The board declared an interim dividend of ₹26 per share, up 13% from ₹23 per share a year earlier. November 3, 2026, has been fixed as the record date, with payment scheduled for November 11.
Infosys' employee headcount increased by 4,480 sequentially to 332,542 at the end of September. Voluntary attrition in IT services declined to 12.7% from 14.3% a year earlier.
Shares of Infosys Ltd ended nearly flat at ₹1,153.80 apiece on the NSE on Friday. The stock has declined over 24% in the past year, underperforming the Nifty 50, which fell more than 12% over the same period.