Infosys shares declined 5.03% to ₹1,178.20 on the NSE, hitting a fresh 52-week low as investors reacted negatively to the company's subdued growth outlook and broader weakness across technology stocks. According to latest reports, the stock has tumbled nearly 32% in less than 3 months from its 52-week high of ₹1,727.85 hit on February 3, 2026, with the company's market capitalization declining by ₹19,503.61 crore to ₹4,84,728.11 crore. The weakness in Infosys made it one of the worst performers on benchmark indices, with the IT pack remaining under pressure as sentiment across the sector stayed fragile following earnings. The Nifty IT index declined sharply, emerging as the top sectoral laggard in early trade. During US trading, the company's ADR also fell, further demonstrating that this concern is structural and recognized globally, as opposed to being local and sentiment-driven.
Dollar revenue declined 1.2% sequentially in Q4FY26, missing expectations despite only marginal margin improvement. According to Outlook Business, sequential constant currency revenue fell 1.3% in the March quarter, against consensus estimates of a 0.5% drop, hurt by seasonality and delays in client decision-making. EBIT margins at 20.9% missed expectations, with the company reporting revenue growth of 13.4% YoY to ₹46,402 crore and net profit jumping 20.9% YoY to ₹8,501 crore. Segment-wise weakness was led by manufacturing, financial services and retail, with large deal wins in Q4 standing at $3.2 billion, down 33.3% sequentially. For FY26, large deal total contract value rose around 28% year-on-year to $14.9 billion, with a net-new mix of around 55%.
Infosys provided FY27 revenue guidance of 1.5%-3.5% in constant currency (1.25–3.25% in organic constant currency), which disappointed market expectations despite healthy March-quarter earnings. As reported by Outlook Business, JM Financial noted that Infosys guidance of 1.5–3.5% is below their estimates at the top end, and it tells us that AI is now compressing the existing book of business. The guidance factors in a 75-100 basis points impact from a planned ramp-down with a European client (Daimler) and a change in onsite mix. The cautious outlook comes at a time when global clients, especially in the US and Europe, remain careful about technology spending, with companies still scrutinising budgets, delaying non-essential projects and taking longer to finalise contracts. JM Financial added that telecom demand remains uncertain, while discretionary spending across sectors continues to stay selective, pointing to a challenging near-term demand environment.
HCL Technologies had previously called out that its service line is less exposed to GenAI deflation, with around 2–3% drag on its revenues. As reported by Mint, it estimates a higher drag of 3–5% for the industry over four–five years, implying 15–20% of revenues at risk. HCL's FY27 CC revenue guidance of 1–4% and Wipro's Q1FY27 sequential CC guidance of -2-0% also upset the Street. Motilal Oswal noted that companies, including Infosys, are walking away from large deals due to weak pricing and competitive intensity, reflecting pressure on deal economics. Choice Institutional Equities noted that management acknowledged increased competitive intensity due to rapid advancement in AI, adding to uncertainty around the quantum of AI-led compression. Analysts have flagged that while AI opens fresh opportunities, it may also reduce billing rates for some traditional services and intensify competition in parts of the outsourcing market.
Infosys's margins remained stable at around 21% in FY26, with benefits from currency and Project Maximus being reinvested into AI capabilities and talent. According to Outlook Business, FY27 margin guidance of 20-22% factors in headwinds from wage hikes, AI productivity pass-through, and acquisition impact. The company expects H1FY27 to be stronger than H2, factoring in normal seasonality, with BFSI and Europe likely to see an acceleration in revenue growth aided by healthy deal wins. Free cash flow stood at 125% of net profit for FY26, with return on equity coming in at 31.9%. Motilal Oswal expects growth to moderate, with Infosys likely to deliver around 2.5% organic growth in FY27, a deceleration from the previous year, as benefits from currency movements are being reinvested into AI capabilities and talent development.
