Infosys Cuts Fiscal 2027 Growth Outlook as AI Pricing Pressure Tests IT Demand

Infosys has reduced its fiscal 2027 revenue-growth outlook, a move that highlights how artificial-intelligence investment and changing client buying patterns are reshaping India’s technology-services market.

Guidance moves lower

The Bengaluru-based exporter now expects fiscal 2027 revenue growth of 1%-2%, down from its earlier 1.5%-3% range, according to Reuters. Infosys shares fell 2.7% on October 26 before recovering some ground; Reuters reported the stock was 1.5% lower at 1,136 rupees at 10:53 a.m. IST. That is a reported intraday market move, not a closing price.

Infosys’ official financial snapshot shows second-quarter revenue of 49,244 crore rupees, up 10.7% year on year in reported Indian-rupee terms, while dollar revenue rose 1.3% to $5.145 billion. The company’s operating margin was 21%. Those quarterly figures do not remove the weaker forward outlook.

Why investors are cautious

Reuters cited analysts who pointed to pricing pressure, productivity demands from clients and subdued technology spending among retail and high-tech customers. Clients are also building global capability centres or offshore technology hubs themselves, which can reduce the work outsourced to service providers.

Other analyst explanations reported by Reuters included weaker volumes, smaller-than-expected price increases, a shift toward offshore delivery and Infosys’ exit from a large European manufacturing contract. These are analyst assessments, not a company forecast of every cause of future performance.

The development does not mean AI is replacing all IT-services work. It does indicate that customers are asking suppliers to deliver more productivity and may be negotiating harder over prices. How that pressure affects revenue, margins and the mix of services will depend on client spending and execution.

What to watch

The company remains one of India’s largest IT exporters, but the revised range puts greater importance on demand recovery, deal conversion and the ability to capture AI-related work without sacrificing price. Reuters said analysts’ average rating remained “Buy”, with a median target of 1,180 rupees, based on LSEG data. That target is an analyst estimate, not a guarantee.

Sources

• Reuters report
• Infosys financial snapshot