Infosys Lowers Revenue Forecast Amid AI Industry Shift

Infosys lowered its annual revenue growth forecast for the fiscal year ending March 2027 to between 1% and 2%, down from a previous estimate of 1.5% to 3%. The revision follows weakening sales in the high-technology and retail sectors, which saw year-over-year revenue declines of 17.3% and 7.7%, respectively.

For the July-September quarter, the company reported consolidated revenue of 492.44 billion rupees ($5.145 billion), a 10.7% year-on-year increase. Net profit rose 6.2% to 78.23 billion rupees, though the figure fell below analyst expectations. Despite the lowered outlook, the company secured $5.2 billion in large deals, including a single mega deal exceeding $2 billion.

Artificial intelligence services now account for 10.5% of total revenue, representing a 29% sequential increase. The company is pursuing AI-led transformations with clients such as Mondelez International, Crocs, Inc., and Telia. However, the rise of AI is forcing a shift in business models as clients move from hourly billing to fees tied to productivity gains, creating pricing pressure.

Infosys maintained its operating margin guidance of 20% to 22%, reporting a quarterly margin of 21.0%. The company also announced an interim dividend of 26 rupees per share, a 13% increase over the previous year.