Infosys ADRs hit 6-year low as FY27 guide misses

ADR slide follows earnings and softer FY27 outlook

Infosys Ltd’s American Depository Receipts (ADRs) fell sharply on Thursday after the company reported its fourth-quarter results and issued a cautious growth outlook. The ADRs dropped nearly 7% and traded around $12.53 as of 8:35 p.m., touching their lowest level since September 2020. The move highlighted how sensitive investors remain to forward guidance even when quarterly profit beats estimates. Infosys guided for constant-currency revenue growth of 1.5% to 3.5% for FY27. The guidance was lower than a brokerage estimate range of 2% to 4% cited in the reports. The market reaction also came against a broader weak backdrop for IT stocks, with the NIFTY IT index down nearly 20% year-to-date in one of the referenced notes.

What triggered the sell-off in the US listing

The immediate trigger was the gap between Street expectations and Infosys’s FY27 growth outlook. The company’s range of 1.5% to 3.5% in constant currency signalled a cautious near-term demand environment, according to the report. In pre-market trading, another update said ADRs were down about 5.5% at $12.75 at 8:05 EDT. The sell-off extended to the domestic stock as well, with Infosys shares closing nearly 3% lower at ₹1,231.8 on April 23 in one of the updates. Another line in the dataset said the domestic stock ended down around 2.21% near ₹1,240.60. The multiple prints reflect different snapshots across the trading session, but the direction remained negative. One report also said the stock had lost 24.4% so far this year.

Q4FY26 profit beat, helped by margin expansion

Infosys reported a sharp rise in quarterly profit. Net profit jumped 27.8% year-on-year to ₹8,501 crore in Q4FY26, compared with ₹6,654 crore a year earlier, beating an analyst estimate of ₹7,496 crore. Another passage in the dataset cited net profit at ₹8,509 crore and a year-ago base of ₹7,038 crore, indicating separate summaries of the same quarter by different sources. Operating income, or earnings before interest and taxes (EBIT), rose 3% year-on-year to ₹9,743 crore. EBIT margin expanded to 21%, compared with 20.8% in the previous quarter in one report. Another update described the margin improvement from 18.4% in the previous quarter to 21% and linked it to better operational efficiency. Infosys also said it retained its operating margin guidance at 20% to 22% for FY27.

Revenue growth: year-on-year rise, modest sequential move

Revenue for the three months ended March was reported at ₹46,402 crore. Using the year-ago quarter revenue cited in the dataset (₹40,925 crore for Q4FY25), that implies a 13.4% year-on-year increase, which one of the excerpts explicitly stated. The same dataset also mentioned revenue rising 2% year-on-year to ₹46,402 crore versus ₹45,479 crore, but the ₹45,479 crore figure was also referenced as the previous quarter’s revenue. Read together, the numbers point to modest sequential growth of about 2% on a reported basis, alongside stronger year-on-year growth. Reuters-linked text also said the quarterly revenue surpassed an LSEG-compiled estimate of ₹46,030 crore. Even with the revenue print, the cautious FY27 view dominated trading in the ADRs.

Constant-currency growth and the demand signal

Beyond guidance, investors also reacted to signs of slowing momentum in constant-currency terms. The dataset said Infosys’ constant-currency (CC) growth declined by 1.3% to 3.1% in the quarter ended March, described as the sharpest decline in four quarters. A management quote in one of the excerpts referenced a “resilient performance” and said FY26 growth was 3.1%, while also highlighting large deal wins. That quote also mentioned strong large deal wins of $14.9 billion, framing it as evidence of enterprise AI-led transformation demand. Still, the market response suggested traders were more focused on the near-term conversion of demand into revenue.

Segment performance that supported Q4 revenue

The dataset attributed Q4 revenue momentum to improved demand in banking, energy and communications. It also listed growth rates for several segments. Revenue from communications rose over 12.6% year-on-year, while manufacturing rose 15.9% year-on-year. Financial services jumped nearly 5%, and energy, utilities, resources and services rose 8.3%. In contrast, income from Hi-Tech fell nearly 1.5%. These segment trends help explain how the quarter stayed firm even as the forward outlook remained cautious.

Deals, dividends, and other operating indicators

Infosys disclosed some deal metrics that investors typically track alongside guidance. Large order bookings, defined in one excerpt as deals over $10 million, stood at $1.2 billion during the quarter, versus $1.8 billion in the previous quarter and $1.6 billion a year earlier. The company also announced a dividend of ₹25 per share. Another passage said the final dividend recommendation of ₹25 per share brought the total dividend for FY26 to ₹48 per share. One summary also said attrition rose to 12.6% and headcount fell by over 8,000 employees in Q4FY26, framing it as a possible cost-optimisation signal, though no additional detail was provided.

Key numbers at a glance

Market impact

The ADR fall underscored the premium markets place on forward visibility for Indian IT services exporters, especially when global discretionary spending is uncertain. Even though profit beat estimates and margins expanded, the FY27 growth range of 1.5% to 3.5% was viewed as cautious relative to expectations cited in the reports. The domestic stock also declined on the day of results, with one excerpt putting the close near ₹1,231.8, down almost 3%. The dataset also noted a steep year-to-date decline of 24.4% for the stock, reflecting broader sector pressure. Another excerpt linked the sentiment to a broader IT sector downturn following weak outcomes and guidance commentary from peers. In this environment, guidance misses can outweigh a strong quarter because they shape earnings expectations and valuation multiples.

Analysis: why guidance mattered more than the quarter

The information in the dataset points to a familiar market pattern for IT services stocks: earnings quality matters, but guidance sets the near-term narrative. Infosys delivered margin improvement to 21% and posted strong year-on-year profit growth, yet traders focused on the FY27 growth band and the constant-currency growth signal. At the same time, the company highlighted demand pockets and deal wins, including $14.9 billion of large deal wins in FY26. That contrast suggests the market is weighing the pace of conversion of deal pipelines into near-term revenue. Segment growth in communications, manufacturing, financial services, and energy helped Q4 performance, but the guidance implied that this strength may not translate into faster overall growth immediately.

Conclusion

Infosys ADRs fell to a multi-year low after Q4FY26 results as the FY27 constant-currency revenue growth guidance of 1.5% to 3.5% disappointed expectations cited in the reports. The quarter showed stronger profit and margin expansion, with revenue at ₹46,402 crore and net profit at ₹8,501 crore. Investors will now track follow-through on the company’s deal pipeline, commentary on demand conditions, and how segment momentum in banking, energy and communications plays out through FY27.