- Infosys cut FY27 revenue growth forecast to 1.5%-3% from 1.5%-3.5% previously
- CEO cited weaker macroeconomic outlook and one-time client revenue impact
- CFO highlighted lost deal, softer volumes, and pricing as additional challenges
Infosys Ltd. has trimmed its constant currency revenue forecast for financial year 2027 to between 1.5% and 3% from 1.5-3.5% in the preceding quarter.
The cut in the upper band of guidance comes on the back of a host of headwinds that the management outlined in the post-earnings conference call.
Infosys had a one-time revenue impact from a client decision that is expected to spill over, on top of a unstable macro environment.
"The upper end of the guidance was really based on if the macro was improving. We now see the macro, it may improve, but not at the level that we were thinking initially," said CEO Salil Parekh. He added that the guidance was based on how the macro environment is today, instead of what can be predicted of it.
Further, CFO Jayesh Sanghrajka flagged additional headwinds including a deal which was lost in Q1, along with softer than anticipated volumes and price.
The deal was with a European client where they decided to not bid beyond a point because "it did not make commercial sense or economic sense."
He underscored that that the impact of these headwinds is going to spill over till the end of the fiscal; additionally, Q4 will be impacted by another deal which is coming to a close in December.
"You know, whatever happens in Q1 typically has a cascading impact on the whole year. While we will see benefit coming out of the acquisition that we completed in Q1, the one off impact that we had in Q1, the softer than expected volume and price that we got in Q1 will have a cascading effect on the rest of the year," Sanghrajka stated.
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Infosys Q1 FY27 (Consolidated, QoQ)
- Net profit down 8.6% to Rs 7,769 crore from Rs 8,501 crore (in line with estimate of Rs 7,774 crore)
- Revenue up 3.9% to Rs 48,211 crore from Rs 46,402 crore (versus estimate of Rs 48,222 crore)
- Ebit up 4.3% to Rs 10,163 crore from Rs 9,743 crore (above estimate of Rs 10,124 crore)
- Margin up 9 basis points to 21.08% from 20.99% (ahead of estimate of 20.99%)
Infosys Share Price
Shares of Infosys closed marginally lower at Rs 1,051.80 apiece on the BSE ahead of the result announcement. The stock has fallen over 35% year-to-date and 33.5% in the last 12 months.
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