Infosys Q1 earnings: IT major cuts FY27 revenue forecast amid muted demand expectations

IT major Infosys pared the upper end of its sales growth outlook on Thursday. Q1 earnings showed that global clients slow down technology spending at a time of heightened interest rates and geopolitical conflicts. The country's second-largest IT major said revenue will grow 1.5% to 3% in the current fiscal through March 2027 on a constant currency basis.

The Bengaluru-based firm had guided for 1.5% to 3.5% growth in April.  According to Bloomberg estimates, analysts were forecasting 3.4% growth on an average.

Infosys and country's largest IT major Tata Consultancy Services are cutting expenses and reducing graduate hiring amid a falling demand for legacy IT projects as clients are banking more on artificial intelligence.

Meanwhile, Infosys announced on Thursday that net profit for Q1 grew 12% to Rs 7769 crore against a profit of Rs 6921 crore in the year ago period.  Revenue from operations climbed 14% to Rs 48,211 crore in June 2026 quarter compared to Rs 42,279 crore in Q1FY26.

Artificial intelligence continued to play a larger role in Infosys' business during the quarter, with AI-led services contributing 8.2% of the company's total revenue, up from 5.5% in the December quarter. The increase reflects growing enterprise spending on AI transformation projects and the company's expanding portfolio of AI-enabled offerings.

Infosys also reported healthy momentum in large deal wins. Contracts valued at more than $30 million totalled $3.6 billion during the quarter, improving from $3.2 billion in the preceding quarter, although slightly lower than the $3.8 billion recorded in the corresponding period last year.

Among the key client additions during the quarter were Sterling Bank of Asia, semiconductor manufacturer GlobalFoundries, and Malaysia-based healthcare provider IHH Healthcare. These wins span the banking, semiconductor and healthcare sectors, underscoring Infosys' broad-based demand across industries and geographies.

Infosys' shares closed 0.05% lower at Rs 1051.80 on BSE ahead of the Q1 results today. Market cap of the firm stood at Rs 4.26 lakh crore.