Infosys results: profit up 6.2%, but FY27 growth outlook cut to 1-2%
By Neha KapoorEconomy Correspondent, Peepals Business
Representative image: fancycrave1 / Pixabay
Infosys reported Q2 FY27 profit of Rs 7,823 crore on October 23, 2026, up 6.2%, and cut its FY27 growth outlook to 1-2% even as AI revenue rose.
What Happened
Infosys reported on Friday, October 23, 2026, a consolidated net profit of Rs 7,823 crore for the July to September quarter, up 6.2% from a year earlier. Revenue rose 10.7% to Rs 49,244 crore. But the Bengaluru-based company lowered its revenue growth outlook for the financial year 2026-27 to 1% to 2% in constant currency, from 1.5% to 3% earlier, even as it said revenue from artificial intelligence (AI) work grew sharply.
Key Facts
- Net profit: Rs 7,823 crore for the September 2026 quarter, up 6.2% year on year.
- Revenue: Rs 49,244 crore, up 10.7% year on year in rupees; in constant currency, growth was 1.5% year on year and 1.2% over the previous quarter.
- Outlook: FY27 revenue growth guidance cut to 1% to 2% in constant currency, from 1.5% to 3%.
- AI work made up 10.5% of revenue and grew 29% over the previous quarter, according to the company.
- Large deals signed in the quarter were worth $5.2 billion.
- Headcount stood at 332,542 at the end of September, 4,480 more than three months earlier; attrition was 12.7%.
- The company's free cash flow was Rs 8,898 crore, down 8.1% year on year.
- Profit came in below the Bloomberg analysts' estimate of Rs 7,904 crore, while revenue beat the estimate of about Rs 49,108 crore.
Why It Matters
Infosys's numbers are watched as a guide to how much large companies in the United States and Europe are spending on technology. The quarter shows two things happening at once. On one side, clients are signing big contracts: $5.2 billion of large deals is a healthy figure, and AI work is now more than a tenth of the company's revenue. On the other side, the company now expects to grow its revenue only 1% to 2% this year in constant currency, which is lower than before.
Constant currency means growth measured as if exchange rates had not moved. It is the better guide to real business growth for an IT exporter. The 10.7% rise in rupee revenue looks strong mainly because the rupee is much weaker against the dollar than a year ago, so each dollar earned abroad is worth more rupees. In constant currency, the company grew only 1.5% from a year earlier.
The gap between strong AI growth and weak overall growth points to a problem the whole Indian IT industry faces. AI tools let companies do the same software and maintenance work with fewer people and lower bills. So even as clients buy new AI services, some of the older, larger streams of work shrink or get cheaper. Brokerages had flagged this "AI-led deflation" before the results. The lower outlook suggests that, for now, new AI work is not yet fully making up for the shrinking older work.
For business readers, the figures also show where the money is going inside client firms. Spending is shifting from large, people-heavy outsourcing contracts towards AI projects, automation and modernising old systems.
| | Measure | Q2 FY27 | Change | |
|---|---|---|
| | Net profit | Rs 7,823 crore | up 6.2% year on year | |
| | Revenue | Rs 49,244 crore | up 10.7% year on year | |
| | Constant-currency growth | not applicable | 1.5% year on year, 1.2% quarter on quarter | |
| | FY27 growth outlook | 1% to 2% | cut from 1.5% to 3% | |
Impact
Short-term: The lower outlook is likely to weigh on how investors view IT shares in the next trading sessions, though the strong deal wins and the revenue beat give some balance. Other IT companies' results and comments will now be read against Infosys's.
Long-term: If AI keeps cutting the price of routine IT work, Indian IT companies will need to win more AI and consulting work to grow. Infosys's AI revenue share, 10.5% now, will be a number to watch each quarter.
Who is affected: Shareholders of Infosys and other IT companies; the company's more than 3.3 lakh employees, whose hiring and pay depend on growth; job-seekers in IT, as companies hire more carefully; and clients, who may benefit from lower prices for routine services.
Key Takeaway
Infosys grew profit 6.2% to Rs 7,823 crore and won $5.2 billion of large deals in Q2 FY27, but cut its full-year growth outlook to 1% to 2%, showing that AI is both adding new work and shrinking old work.
Questions and Answers
What were Infosys's Q2 FY27 results?
For the quarter ended September 30, 2026, Infosys reported a net profit of Rs 7,823 crore, up 6.2% from a year earlier, and revenue of Rs 49,244 crore, up 10.7%. The results were announced on October 23, 2026.
Did Infosys change its revenue guidance?
Yes. Infosys now expects FY27 revenue to grow 1% to 2% in constant currency, down from its earlier range of 1.5% to 3%.
How big is AI in Infosys's business?
According to the company, AI work made up 10.5% of revenue in the September quarter and grew 29% over the previous quarter.
Did Infosys hire more people this quarter?
Yes. Headcount rose by 4,480 during the quarter to 332,542 at the end of September 2026, and attrition, the share of staff leaving, was 12.7%.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
By Neha Kapoor, Economy CorrespondentCovers Economy and more for Peepals Business. All stories by Neha Kapoor
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