[INFY] Infosys: Q2 FY2027 Earnings Test Organic Growth Amid AI Price Deflation

Infosys, the Indian IT services company that provides consulting, software development, systems operations and business-process outsourcing to large global enterprises, will hold its earnings call on 2026-10-23 [1] to report the second quarter of fiscal 2027, ending September 30, 2026. Heading into Infosys Q2 FY2027 earnings, the latest disclosed quarter, the first quarter of fiscal 2027 (April to June 2026), produced revenue of $5.082 billion, up 2.4% year on year and 1.0% sequentially in constant currency, with an operating margin of 21.1%, free cash flow of $955 million and large-deal wins of $3.6 billion; the company gives no quarterly guidance, and in July it cut its fiscal 2027 constant-currency revenue growth guidance to 1.5%-3.0% while keeping operating margin guidance at 20%-22% [2]. The consensus compiled by Drillr from 9 analysts puts second-quarter revenue at $5.106 billion (range $5.067 billion to $5.146 billion), about 0.5% above first-quarter actual revenue, and the mean EPS estimate from 5 analysts is $0.204 [3]; the earnings calendar lists a revenue estimate of $5.112 billion, but it records first-quarter actual revenue as $4.992 billion, which does not match the company's reported $5.082 billion, so that series is only a reference point [1].

Three things matter most in this report. The first is whether revenue is still growing once acquisitions are removed: about 1.1 percentage points of the 1.0% sequential growth in the first quarter came from acquisitions [4], about 1.7 points of the full-year guidance comes from the newly acquired Optimum and Stratus [5], and the CFO said weak first-quarter volumes would cascade into the second quarter [6], so second-quarter organic growth decides whether the claim that new business offsets AI price deflation holds up. The second is the operating margin in the last quarter before October wage increases: 70 basis points of the first quarter's 21.1% margin came from rupee depreciation, and utilization excluding trainees rose to 84.9% [7], so a second-quarter margin below 21% that rests mainly on currency would leave little room to defend the 20% floor for the year. The third is whether financial services and energy, utilities, resources and services (EURS) outgrow the company average as management says they will [5]: in the first quarter they grew only 2.4% and 1.3% year on year in constant currency, and manufacturing grew 1.0% [8], so their ability to lead determines whether reduced spending by a large European manufacturing client can be offset.

Company Background and Business Structure

Infosys is a large Indian offshore IT services provider whose workforce and delivery are heavily concentrated in India. Founded in 1981 and headquartered in Bengaluru, the company is listed on the National Stock Exchange of India, the BSE and the NYSE (American depositary shares under INFY); as of March 31, 2026 it had 328,594 employees, of whom 310,887 were delivery professionals including trainees and 258,502 were based in India [9]. Chief executive Salil Parekh's term ends on March 31, 2027, and on July 23, 2026 the board named Ashiss Kumar Dash, an internal candidate with more than 31 years at the company, as CEO-designate [10].

The company reports eight segments organized by client industry, and financial services is the largest. In fiscal 2026 (ended March 2026) the revenue mix was financial services 27.9%, manufacturing 16.3%, energy, utilities, resources and services 13.3%, retail 12.9%, communication 12.2%, hi-tech 7.8%, life sciences 6.9% and other segments 2.7% [11]. By type of work, 95.2% of revenue came from software and business-process services and 4.8% from products and platforms such as the Finacle core banking system, while fixed-price contracts made up 54% of revenue [12]; many contracts allow clients to terminate on 0 to 90 days' notice, and cash is collected as milestones are completed [13].

Revenue is concentrated in North America and Europe while costs are mostly in rupees, which puts the exchange rate directly into the margin. In fiscal 2026 North America contributed 56.1% of revenue, Europe 32.1%, the rest of the world 8.9% and India 2.9%, and 62.9% of revenue was billed in US dollars and 17.4% in euros, so a weaker rupee lifts the margin [14]. Client concentration is moderate but material: the five largest clients provided 12.9% of fiscal 2026 revenue and the ten largest about 20.5% [15]; by the first quarter of fiscal 2027 the top ten had fallen to 19.9%, 41 clients generated more than $100 million in trailing-twelve-month revenue, and there were 2,027 active clients [16].

Delivery runs mainly through offshore centers in India, and acquisitions in April and May 2026 expanded the healthcare and insurance businesses. In fiscal 2026 offshore work accounted for 76.8% of effort and onsite work for 23.2%; onsite services earn more revenue per person but at a lower gross margin [12], and the onsite share was 22.8% in the first quarter of fiscal 2027 [17]. Through a wholly owned subsidiary, the company completed the acquisition of US insurance technology firm Stratus (up to $95 million including earn-outs) on April 21, 2026 and of healthcare digital consulting firm Optimum Healthcare IT (up to $465 million including earn-outs) on May 4, 2026, and both are fully consolidated [18]; life sciences revenue rose 24.0% year on year in constant currency in the first quarter, mainly because Optimum was consolidated [8].

Financial History and Current Position

Over the past four years Infosys grew revenue much faster than profit. Revenue rose from $16.311 billion in fiscal 2022 to $20.158 billion in fiscal 2026, a compound annual growth rate of 5.4%; operating profit rose from $3.755 billion to $4.085 billion, a compound rate of only 2.1%; and net profit attributable to owners rose from $2.963 billion to $3.313 billion [19]. Fiscal 2026 revenue grew 4.6% in reported currency and 3.1% in constant currency [20].

The fiscal 2026 margin slipped slightly, and a one-time labor-code charge was one of the main reasons. The reported operating margin was 20.3%, down from 21.1% the year before; excluding the $143 million one-time impact of India's new Labour Codes, the adjusted operating margin was 21.0% [21]. Cost of sales rose by 0.3 percentage points of revenue during the year because of pay increases, the Labour Codes, lower utilization and more subcontracting, partly offset by a higher offshore mix; of $14.079 billion in cost of sales, employee benefits were $9.739 billion, technical subcontractors $1.740 billion and third-party items bought for clients $1.452 billion, and gross margin fell from 30.5% to 30.2% [22].

Cash flow is steady and most of it goes back to shareholders. Fiscal 2026 operating cash flow was $4.039 billion, $312 million lower than the year before mainly because fiscal 2025 included larger income tax refunds, and days sales outstanding (DSO) were 67 at year end [23]; capital expenditure was $306 million [24], leaving free cash flow of roughly $3.733 billion. The company completed a buyback of ₹180 billion (about $2 billion) in December 2025 [25], ended the year with no borrowings and $5.396 billion of working capital, including $2.341 billion of cash and equivalents and $1.365 billion of current investments [26], and the board recommended a fiscal 2026 final dividend of ₹25 per share (about $0.26) [27].

In the first quarter of fiscal 2027 (April to June 2026) revenue returned to growth, but taxes weighed on net profit. Revenue was $5.082 billion, up 2.8% year on year and 0.8% sequentially in reported currency; gross profit was $1.600 billion, a gross margin of about 31.5%; operating profit was $1.072 billion for an operating margin of 21.1%, compared with 20.8% a year earlier and 20.9% in the prior quarter; and net profit was $819 million, up 1.3% year on year but down 10.9% sequentially because income tax rose from $248 million to $343 million [28]. Free cash flow was $955 million, or 116.5% of net profit [2]; cash and investments ended the quarter at $3.916 billion, down from $4.542 billion at the end of March after the company paid more than $1 billion in dividends [29]; and DSO fell to 63 days [16].

Operating Model

Revenue depends on billed headcount, realized pricing, large-deal ramp-ups and acquisitions, and AI-driven price deflation is the new deduction. Revenue can be understood as billed person-months across client industries multiplied by realized rates, plus revenue recognized on fixed-price projects as work progresses, product and platform revenue and acquired revenue; growth comes from large deals that typically run three to five years and ramp up quarter by quarter, while the deduction is AI productivity price cuts at renewal and mid-contract, which management says affect both large and non-large deals [30]. The effects arrive with clear lags: acquisitions add revenue in the quarter they are consolidated, about 1.7 points for the year; the shift toward offshore delivery reduces revenue by 0.75% to 1% within the year; and reduced spending by a large European manufacturing client plus deals the company chose not to pursue subtract slightly more than 1 point [5].

The operating margin depends on the cost structure, utilization, delivery location and the exchange rate, and wage increases are a predictable quarterly shock. On a fiscal 2026 basis, employee pay was roughly 48% of revenue, technical subcontracting about 9% and third-party items about 7%, and because staff costs are largely fixed at the start of each quarter, pricing, utilization, onsite mix, subcontracting and the staff pyramid, the timing of pay rises and the rupee rate together set the margin [22]. Project Maximus is the company's margin program, covering value-based pricing, a more efficient staff pyramid, automation and generative AI, improvement of key portfolios and lower indirect costs, with the savings reinvested in talent, AI and sales [31]. This year's pay rises take effect in two batches, in October and January 2027 [7], so fiscal 2027 bears only half a year and one quarter of their cost, a smaller relative impact than in fiscal 2026 [32]; the two acquisitions add roughly 50 basis points of margin pressure [5].

Free cash flow tracks net profit closely, and the capital return policy decides where the cash goes. Operating cash flow equals net profit plus depreciation and amortization, minus increases in receivables and unbilled revenue and minus income tax; because capital expenditure is only about 1.5% of revenue, free cash flow is close to or above net profit, and in the first quarter it was 116.5% of net profit [2]. The company's policy is to return about 85% of free cash flow cumulatively over five years through dividends, buybacks or special dividends, while raising the annual dividend per share [27]; changes in DSO show up in free cash flow within one or two quarters.

Industry and Competitive Position

Infosys operates in a market crowded with competitors and with clients building their own capabilities. By revenue it is the second-largest Indian IT services company after Tata Consultancy Services (TCS), competing with Indian peers such as TCS, HCLTech, Wipro and Tech Mahindra and with global providers such as Accenture, Capgemini and Cognizant; its annual report lists large consulting firms, India-based firms, software vendors, niche providers, clients' in-house IT departments and global capability centers (GCCs) as competitors [33].

The company's strengths are offshore delivery scale, long client relationships and AI delivery capacity. Forty-one clients generated more than $100 million in trailing-twelve-month revenue [16], the company says it is already working with 90% of its top 200 clients on AI [34], and more than 80,000 delivery employees use coding tools such as Claude Code or Codex on client and internal projects [35]. Vendor consolidation deals made up 20% of the $3.6 billion in first-quarter large-deal value, which places the company on the winning side of consolidation [36]; management also plans to hire 20,000 college graduates this fiscal year, reasoning that the same work can be done with fewer people but the total amount of work is growing [37].

The industry's central tension is that AI creates new demand while shrinking old revenue, and the available record does not allow a quantitative peer comparison. The annual report acknowledges that AI has reduced and may continue to reduce demand for certain existing services, intensify pricing and productivity pressure, and require the company to move existing engagements to automated or AI-enabled services [38]; if competitors use their AI investment to promise clients a lower total cost of ownership, Infosys may have to cut prices to keep clients [33]. The available record covers only Infosys's own disclosures and contains no peer revenue growth, margins or AI revenue shares, so it cannot place Infosys's AI progress relative to its peers.

Core Debates

AI services reached 8.2% of revenue and large deals totaled $3.6 billion in Q1, yet Infosys cut its full-year outlook. Once acquisitions are stripped out, can second-quarter revenue still grow?

This debate decides whether Infosys's revenue has stopped growing organically. The company prices its work by labor input and delivered outcomes, so when clients use AI to demand higher productivity they directly cut revenue on existing contracts; management calls this "AI-led deflation" and says it appears both in large-deal renewals and in non-large-deal work, and has to be offset by net new business [30]. In July the company lowered its fiscal 2027 constant-currency growth guidance from 1.5%-3.5% to 1.5%-3.0% [2], and about 1.7 points of that comes from the two acquisitions [5]; if organic growth is close to zero, a steady margin and shareholder returns cannot change the conclusion that revenue has stalled.

The evidence that revenue is still growing sits in bookings and AI work, while the evidence against it sits in the composition of growth. First-quarter revenue was $5.082 billion, up 2.4% year on year and 1.0% sequentially in constant currency [2]; 22 large deals totaled $3.6 billion with 61% net new, including three deals of about $400 million each, and 20% came from vendor consolidation [36]; AI services were 8.2% of revenue, and management said they had grown at double digits sequentially for many quarters. But acquisitions contributed about 1.1 points of the 1.0% sequential growth, implying roughly zero organic sequential growth, and management blamed the shortfall on a program termination by an EURS client (about 50 basis points), volumes weaker than in past first quarters, and softer price increases caused by client productivity demands and intense competition [4]. The CFO also said weak first-quarter volumes would cascade into the second quarter and the rest of the year [6].

Revenue change can be split into three forces, and the company does not disclose the size of each. Existing contracts reprice lower at renewal or mid-term because of AI productivity demands, which directly reduces revenue; net new large deals ramp up quarter by quarter over three- to five-year terms and, together with AI services, add revenue; and consolidated acquisitions contribute about 1.7 points for the year, while reduced spending by the large European manufacturing client and deals the company declined subtract slightly more than 1 point and the offshore shift subtracts 0.75% to 1% [5]. The company does not quantify the deflation or disclose acquired revenue and organic growth, so outsiders can only infer them from total growth. An alternative reading is that strong bookings mainly reflect a high share of renewals and vendor consolidation, that new contracts carry lower rates after AI price cuts, and that total contract value (TCV) does not equal incremental revenue.

The second-quarter test is whether year-on-year constant-currency growth holds at 2.2% or better and sequential growth at 1.0% or better, and whether management explains organic growth excluding acquisitions. If the AI services share rises above 9% while total revenue accelerates, full-year guidance stays at 1.5%-3.0%, and large-deal value and the net-new share hold, that supports the view that net new business is offsetting price deflation. Conversely, year-on-year growth below 1.2% or another guidance cut would show that deflation and weak volumes are persisting; even if growth meets the bar, growth driven mainly by acquisitions while organic revenue keeps falling would also weaken that view.

With revenue growth slowing, Infosys lifted its operating margin to 21.1% on higher utilization and a weaker rupee. Can it hold that level in the second quarter, the last one before October wage increases take effect?

The margin band is the main yardstick for judging the stability of Infosys's earnings, and the second quarter is the last one before October wage increases. The company's adjusted operating margin was 21.0% in fiscal 2026 and 21.1% in fiscal 2025 [21], and fiscal 2027 guidance remains 20%-22%, a band that already absorbs wage increases, productivity pass-throughs, AI investment and roughly 50 basis points from the two acquisitions [5]. If the margin already falls noticeably before the pay rises, and the second half then absorbs the raises and amortization, there would be little room left to defend the 20% floor for the year.

Currency was the largest source of the first-quarter margin improvement, though operating efficiency also contributed. The operating margin was 21.1%, up 20 basis points sequentially and 30 basis points year on year, and gross margin was about 31.5% [28]; in management's margin bridge, rupee depreciation added 70 basis points, Project Maximus 20 basis points and net amortization effects 10 basis points, while AI and sales investment subtracted 50 basis points and the program termination 40 basis points, and a one-time cost benefit of about 30 basis points was offset by 20 basis points of other expenses. Utilization excluding trainees rose 1.9 points to 84.9%, and headcount fell by about 500 even after more than 2,000 employees joined through acquisitions [7].

Wage timing and delivery mix support a stable margin, but currency and one-time gains discount that conclusion. The CFO said fiscal 2027 bears only half a year of the October raise and one quarter of the January raise, a smaller relative impact than in fiscal 2026 [32]; the company also plans to cut the onsite share excluding acquisitions by 75 basis points to 1 point over the year [7]. Utilization, onsite mix, subcontracting and the staff pyramid set unit delivery cost, the rupee rate sets what those costs are worth in dollars, AI and sales investment, acquisition amortization and pay rises weigh directly on the operating margin, and DSO then sets how fast profit turns into free cash flow. An alternative reading is that the first-quarter margin rested mainly on currency and a one-time cost benefit with limited help from efficiency; if the rupee strengthens, or utilization drops as about 20,000 graduates join this fiscal year [37], the margin could fall before the raises take effect.

In the second quarter, the key question is whether the operating margin holds at 21.0% or better and how the margin bridge splits between currency and operations. Other tests are whether gross margin stays around 31.5%, whether utilization excluding trainees holds at 84.5% or better, and whether the onsite share keeps falling from the first quarter's 22.8% [17]; first-quarter free cash flow was $955 million, or 116.5% of net profit [2], and DSO was 63 days [16], so whether second-quarter free cash flow stays at or above net profit and DSO stays within 65 days is the cash-side test. An operating margin below 20.5% or a cut to the 20%-22% guidance would directly falsify the stable-margin view; a margin that holds only because of rupee depreciation while utilization slips would show that stability is more fragile than the headline figure suggests.

Management expects financial services and energy-utilities to outgrow the company this year, but neither did so in Q1. Can they lead in the second quarter and offset reduced spending by a large European manufacturing client?

Financial services, EURS and manufacturing together make up nearly 60% of revenue, and management is counting on the first two to carry this year's growth. In fiscal 2026 their revenue shares were 27.9%, 13.3% and 16.3% respectively [11]; within the guidance cut, reduced spending by the large European manufacturing client and deals the company chose not to pursue subtract slightly more than 1 point, while management said financial services and EURS will grow faster than the company average this year [5]. Second-quarter segment data is the first chance to test that division of labor.

In the first quarter none of the three segments beat the company's overall 2.4% year-on-year constant-currency growth. Financial services grew 2.4%, EURS 1.3% and manufacturing 1.0% [8]; financial services won about $1 billion in net new large-deal value with momentum across banking, payments, capital markets and wealth management, EURS was held back by a one-off client termination and management said growth excluding it was strong, and manufacturing was hurt by reduced spending at one large client and longer decision cycles in European auto [36]. The three also differ in profitability: fiscal 2026 segment margins were 25.3% for financial services, 25.1% for EURS and 22.1% for manufacturing, and large deals carry lower margins early on because of transition costs and a higher onsite mix [39].

The three segments draw on different client budgets, and the organic growth rate of financial services is still unclear. Modernization and AI budgets at banks, insurers and payment firms drive financial services revenue; cost optimization and generative AI projects at utilities and energy clients drive EURS, which in the first quarter lost about 50 basis points to the one-off termination [4]; and European auto and manufacturing clients squeezed by tariffs and energy costs are cutting budgets, which directly reduces manufacturing revenue, with the three together setting the company's growth rate. Stratus, the insurance technology firm consolidated in April [18], may account for part of financial services growth, so organic growth there could be below the company average. An alternative reading is that the EURS termination and the manufacturing client's cutback, which management describes as unrelated coincidences, both reflect clients squeezing outsourcing spend.

In the second quarter, the test is whether financial services and EURS both grow faster than the company overall and whether manufacturing stays above 0%. Whether management breaks out Stratus's contribution to financial services growth, and whether the top ten clients' share keeps falling from 19.9% [16], are also part of the test. If financial services again fails to beat the company average, the expectation that it will lead has not been met; if manufacturing turns negative, the European client's cutback is widening.

Risks and Falsifiers

The first risk is that AI and competition together shrink traditional outsourcing demand. The annual report says AI has reduced and may continue to reduce demand for certain existing services and intensify pricing and productivity pressure [38], while clients' own IT departments, global capability centers, hyperscale cloud providers and AI-native firms may all divert demand, and AI has lowered the barriers to entry for new competitors [33]. The exposure is the pricing and renewal volume of all revenue ($20.158 billion in fiscal 2026), and one of the reasons for the fiscal 2027 guidance cut was softer price increases caused by client productivity demands and competition [4]. If year-on-year constant-currency growth holds at 2.2% or better for two consecutive quarters and management says pricing is better than expected, this risk is smaller than currently understood.

The second risk is the CEO handover. Salil Parekh's term ends on March 31, 2027, and internal candidate Ashiss Kumar Dash will complete the transition alongside him over the coming months [10], which creates execution risk for the continuity of strategy and key client relationships during the handover. The risk does not map to a single financial line; any disruption would show up first in large-deal value and large-client shares, and large-deal value holding above $3 billion per quarter during the handover with no unusual departures of executives or major clients would falsify the concern.

The third risk is that AI productivity price cuts spread from renewals into existing contracts mid-term, depressing both large-deal and non-large-deal revenue, while the company does not quantify the effect [30]. On fiscal 2026 revenue of $20.158 billion, each percentage point of lost annual growth is worth roughly $200 million [20]; the top of the guidance range has already been cut by 0.5 points because of weaker pricing and other factors [5]. If second-quarter year-on-year constant-currency growth holds at 2.2% or better and management says pricing and volumes improved on the first quarter, the risk has not widened.

The fourth risk is the margin's reliance on a weaker rupee. The dollar averaged ₹88.57 in fiscal 2026 and ended the year at ₹94.84 [21], currency added 70 basis points to the first-quarter margin [7], and a stronger rupee would compress the margin in reverse; on first-quarter revenue of $5.082 billion, each 50 basis points of margin equals about $25 million of quarterly operating profit. If the second-quarter margin bridge shows utilization, Project Maximus and the offshore shift together contributing at least as much as currency, the margin does not depend on the exchange rate alone.

The fifth risk comes from client concentration and single-client events. The top five clients provided 12.9% of fiscal 2026 revenue and the top ten about 20.5% [15], and contracts can be terminated on 0 to 90 days' notice [13]; one EURS client's program termination cut first-quarter revenue by about 50 basis points and the margin by about 40 basis points [7], and the European manufacturing client's cutback reduces full-year growth by slightly more than 1 point [5]. If the second quarter brings no new client terminations or spending cuts and manufacturing grows at least 1.0% year on year, the risk has not materialized further.

What to Watch Next

• Organic revenue growth: year-on-year constant-currency growth against the 2.4% first-quarter baseline and sequential growth against 1.0%, plus any management disclosure of organic growth and whether full-year guidance stays at 1.5%-3.0%. At least 2.2% with positive organic growth supports the current view; below 1.2% or another guidance cut weakens it.
• AI revenue and bookings: whether the AI services share rises above 9% from 8.2% while total revenue accelerates, and whether large-deal value and the net-new share stay near $3.6 billion and 61%. A rising AI share with flat total growth would suggest deflation is still eating the gains.
• Operating margin and its bridge: whether the margin holds at 21.0% or better against 21.1%, and how much comes from operations versus the 70 basis points of currency. Below 20.5% or a cut to the 20%-22% guidance falsifies the stable-margin view.
• Utilization, onsite mix and gross margin: utilization excluding trainees at 84.5% or better against 84.9%, onsite share continuing to fall from 22.8%, and gross margin near 31.5%. A margin held only by the rupee while utilization slips raises doubts about stability.
• Cash conversion: free cash flow at or above net profit against $955 million (116.5% of net profit) and DSO within 65 days against 63. Conversion below net profit or rising DSO would weaken earnings quality.
• Segment leadership: financial services (2.4%) and EURS (1.3%) both growing faster than the company, manufacturing (1.0%) staying above 0%, any breakout of Stratus's contribution, and the top-ten client share against 19.9%. Financial services again at or below average, or manufacturing turning negative, weakens the view.

Conclusion

Infosys's business is driven by billed headcount, realized pricing and large-deal ramp-ups, and its cash conversion has been consistently strong. Fiscal 2026 revenue was $20.158 billion and operating profit $4.085 billion [19], the company has no borrowings [26], and in the first quarter of fiscal 2027 free cash flow was 116.5% of net profit, AI services reached 8.2% of revenue and large-deal wins totaled $3.6 billion [2]. The central unresolved relationship is whether new AI business outruns AI price deflation: organic sequential growth excluding acquisitions was roughly zero in the first quarter [4], and 70 basis points of the 21.1% operating margin came from rupee depreciation [7].

The two independent assessments published after the first-quarter results both lean cautious, but they look at different time horizons. In a July 23 analysis, Dataquest's Shrikanth Govindarajan estimated that, excluding about 1.7 points of acquisition contribution, the underlying growth midpoint had fallen from roughly 2.3% to 0.55%, and argued that the key question is whether new consulting, engineering and data work can scale fast enough to overcome AI-led deflation, cautious enterprise spending and erosion in the traditional portfolio [40]; this is Dataquest's own calculation rather than company guidance, and management's second-quarter comments on organic growth can test it. According to a NiftyTrader report on August 19, a CLSA sector report argued that AI-driven productivity conflicts with per-person billing and will first depress traditional managed-services revenue, that AI-related volume growth may not outweigh the price effect until around fiscal 2030, and that AI will not reach a third of revenue at TCS, Infosys and HCLTech until fiscal 2031 [41]. Both views bear on the first core debate: Dataquest focuses on this year's organic growth gap, while CLSA offers a multi-year judgment that one quarter cannot confirm or refute, although a second quarter in which the AI share keeps climbing while total growth does not would support its logic; neither view addresses the margin or the segment split directly, so those two debates currently lack outside interpretation.

The view that net new business can offset AI price deflation and that the margin can hold its band would be materially strengthened by a combination of observations: second-quarter year-on-year constant-currency growth of at least 2.2% with management confirming positive organic growth, an AI services share above 9% alongside accelerating total revenue, an operating margin near 21% with operational contributions at least matching currency, and both financial services and EURS outgrowing the company average. Conversely, year-on-year growth below 1.2% or another guidance cut, an operating margin below 20.5% or one supported only by the rupee, and a manufacturing segment that turns negative would materially weaken it.

Sources

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[16] INFY 6-K filed 2026-07-28 · Q1 FY27 fact sheet client data and DSO · 2026-07-28 · 6-K · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w04.htm

[17] INFY 6-K filed 2026-07-28 · Q1 FY27 fact sheet effort, utilization and employees · 2026-07-28 · 6-K · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w04.htm

[18] INFY 20-F filed 2026-06-15 · Optimum and Stratus acquisitions completed after year end · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[19] INFY 20-F filed 2026-06-15 · five-year summary of revenues, profit and employees · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[20] INFY 20-F filed 2026-06-15 · revenue growth and constant currency FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[21] INFY 20-F filed 2026-06-15 · reported and adjusted operating profit FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[22] INFY 20-F filed 2026-06-15 · cost of sales and Labour Codes impact FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[23] INFY 20-F filed 2026-06-15 · cash flows and DSO FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[24] INFY 20-F filed 2026-06-15 · capital expenditure FY2024-FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[25] INFY 20-F filed 2026-06-15 · buyback completed December 2025 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[26] INFY 20-F filed 2026-06-15 · liquidity and working capital March 31, 2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[27] INFY 20-F filed 2026-06-15 · capital allocation policy and buyback · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[28] INFY 6-K filed 2026-07-28 · Q1 FY27 fact sheet income statement (USD) · 2026-07-28 · 6-K · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w04.htm

[29] INFY 6-K filed 2026-07-28 · Q1 FY27 fact sheet cash metrics · 2026-07-28 · 6-K · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w04.htm

[30] INFY Q1 FY27 earnings call 2026-07-23 (6-K filed 2026-07-28) · Q&A on AI-led deflation and deal tenure · 2026-07-28 · earnings-call · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w05.htm

[31] INFY 20-F filed 2026-06-15 · Project Maximus margin programme · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[32] INFY Q1 FY27 earnings call 2026-07-23 (6-K filed 2026-07-28) · Q&A on FY27 wage-hike phasing versus FY26 · 2026-07-28 · earnings-call · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w05.htm

[33] INFY 20-F filed 2026-06-15 · competition and pricing risk factor · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[34] INFY 20-F filed 2026-06-15 · AI engagement with top 200 clients · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[35] INFY Q1 FY27 earnings call 2026-07-23 (6-K filed 2026-07-28) · CEO on AI revenue and delivery tools · 2026-07-28 · earnings-call · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w05.htm

[36] INFY Q1 FY27 earnings call 2026-07-23 (6-K filed 2026-07-28) · CFO on large deals and verticals · 2026-07-28 · earnings-call · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w05.htm

[37] INFY Q1 FY27 earnings call 2026-07-23 (6-K filed 2026-07-28) · Q&A on hiring plan and headcount · 2026-07-28 · earnings-call · https://www.sec.gov/Archives/edgar/data/1067491/000106749126000038/exv99w05.htm

[38] INFY 20-F filed 2026-06-15 · technology change and AI transition risk factor · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[39] INFY 20-F filed 2026-06-15 · business segment profit FY2026 · 2026-06-15 · 20-F · https://www.sec.gov/Archives/edgar/data/1067491/000119312526270520/infy-20260331.htm

[40] Dataquest 2026-07-23 · Infosys Q1 FY27 deep dive: CEO handover meets AI’s double-edged business reset · 2026-07-23 · Dataquest · https://www.dqindia.com/infosys-q1-fy27-ai-business-reset-12191760

[41] NiftyTrader 2026-08-19 · AI Revenue Is Surging. Why Did CLSA Cuts TCS, Infosys? · 2026-08-19 · CLSA · https://www.niftytrader.in/markets/clsa-cuts-tcs-infosys-ai-revenue/