Infosys share price drops on FY27 growth guide 1.5-3.5%

What triggered the sell-off in Infosys

Infosys shares fell sharply after the company reported a strong profit increase for the March quarter but issued a weaker-than-expected FY27 revenue growth forecast. The stock slid more than 6% during Friday’s session and touched an intraday low of ₹1,163 on the NSE. In a separate move, Infosys ADRs ended 4% lower, reflecting overseas investor caution after the results.

Market participants focused less on the bottom-line beat and more on the revenue outlook, which several brokerages said did not signal a clear demand recovery. Concerns also surfaced around a sequential decline in headcount and a drop in net new deal wins.

Stock moves: 52-week low and weak close

Infosys fell as much as 7.1% intraday to a fresh 52-week low of ₹1,152.20 on the NSE. It later closed at ₹1,154.60, down 6.93%.

PTI reported that the stock also hit a 52-week low on the BSE at ₹1,193.90. The company’s market valuation declined by ₹19,503.61 crore to ₹4,84,728.11 crore.

Q4FY26 numbers: profit up 21%, revenue up 13.4%

For the quarter ended March 31, 2026, Infosys reported consolidated net profit of ₹8,501 crore, up 21% year-on-year from ₹7,033 crore. Revenue from operations rose 13.4% year-on-year to ₹46,402 crore versus ₹40,925 crore.

Sequentially, revenue increased 2% from ₹45,479 crore in the October-December quarter. Operating margin for the reported quarter stood at 21% - unchanged year-on-year, but higher by 260 basis points compared with the previous quarter.

Dollar revenue and annual performance snapshot

Infosys reported dollar revenue of $1.04 billion for Q4FY26, described as up 6.6% sequentially but down 1.2% year-on-year. Another report in the provided material also described Q4 constant-currency revenue as declining 1.3% quarter-on-quarter, citing seasonal softness and delayed client decision-making in March.

For the full year FY26, net profit climbed 10.20% to ₹29,440 crore from ₹26,713 crore in FY25. FY26 revenue from operations rose 9.6% to ₹178,650 crore. Infosys also ended FY26 with $10.2 billion in annual revenue, up 3.1% year-on-year in constant currency terms.

FY27 guidance: revenue 1.5-3.5%, margin 20-22%

The key disappointment for investors was Infosys’ FY27 constant-currency revenue growth guidance of 1.5% to 3.5%. The company maintained its operating margin outlook at 20% to 22%.

Brokerage commentary in the provided text repeatedly flagged that the guidance suggests a lack of meaningful acceleration. Several notes also pointed to softer demand conditions, slower decision-making, and high competitive intensity.

Deal wins vs near-term caution

Infosys closed FY26 with large deal wins of $14.9 billion, up 24% year-on-year, yet kept FY27 guidance conservative at 1.5-3.5% organic constant-currency growth. PL Capital Research linked the cautious guidance partly to a ramp-down with a large European manufacturing client and right-shoring optimisation.

The same note said the guidance absorbs about 75-100 basis points from the planned client ramp-down and another 40-50 basis points from right-shoring optimisation. Despite the annual large-deal strength, Jefferies flagged that net new deal wins for the fourth quarter were $1.3 billion, down 19% year-on-year.

Headcount and AI: two new pressure points

Jefferies highlighted a 3% sequential decline in headcount alongside the 19% year-on-year drop in net new deal wins. Some brokerages also pointed to AI-led productivity gains compressing traditional pricing, with those gains being passed on to clients.

Motilal Oswal flagged that AI-led deflation is beginning to compress the existing book of business. Another brokerage note in the provided text said the deflationary impact could persist, also influenced by competitive intensity and pricing pressure in a weak demand environment.

What brokerages said: Hold vs Buy, targets trimmed

Brokerages remained divided on the stock, balancing near-term visibility concerns against deal wins and vertical-specific optimism.

• A global brokerage maintained a Hold rating and cut its target price to ₹1,235, citing the weaker-than-expected FY27 guidance.
• Motilal Oswal maintained a Buy rating with an unchanged target price of ₹1,550, factoring growth at the midpoint of the guidance at around 2.5% organic for FY27.
• HDFC Securities also maintained a Buy with an unchanged target price of ₹1,550, while reducing earnings estimates by around 2% to 3% due to the slower growth outlook.
• Morgan Stanley retained an Equal-weight recommendation and reduced its target price to ₹1,380 from ₹1,760, citing a miss across key metrics and limited growth acceleration implied by guidance.

Separately, Citi and Nomura commentary in the provided material described Q4 as weak to slightly below expectations on revenue, with margins stable to modestly better. Nomura said it expects margins to stay stable at around 21% in FY27 and cited management optimism around BFSI and EURS.

Key numbers at a glance

Why the guidance mattered more than the profit beat

The market reaction shows that investors are currently pricing Infosys on forward demand visibility rather than a single-quarter profit performance. The FY27 guidance range of 1.5-3.5% constant-currency growth became the anchor for most analyst downgrades in expectations, especially after management commentary flagged slower decision-making and competitive intensity.

Even supportive factors such as margin improvement, forex benefits referenced by some brokerages, and deal wins were not enough to offset the concern that growth could remain constrained by client optimisation priorities and AI-driven pricing pressure.

Conclusion

Infosys delivered higher Q4 profit and steady margins, but its FY27 revenue growth guidance of 1.5-3.5% in constant currency drove a sharp stock decline to a 52-week low. Brokerages stayed split between Hold and Buy, but target prices were largely trimmed as they reassessed near-term growth visibility, headcount trends, and the impact of AI-led productivity on pricing. The next key marker for sentiment will be how demand and conversion of the deal pipeline translate into quarterly revenue, within the company’s stated FY27 guidance band.