The Bengaluru-based technology group lowered its revenue forecast for the year ending March 2027, as delayed projects and AI-driven pricing pressure weigh on demand.
Infosys has trimmed its revenue outlook for the year ending March 2027, underscoring how cautious corporate clients remain about technology spending even as the Indian outsourcing group pushes deeper into artificial intelligence. In a statement on Friday, the Bengaluru-based company said it now expects constant-currency revenue growth of 1% to 2%, below its previous forecast of 1.5% to 3%. Analysts had been looking for growth of about 2.03%, and the weaker guidance sent its US-listed shares sharply lower in early trading.
The revision points to a wider malaise across India’s more than $280 billion software services sector, where companies such as Infosys and Tata Consultancy Services have been contending with delayed decision-making, tighter budgets and slower large-project demand. According to market reports, investor concern has also been amplified by competitive pressure from AI tools that can generate code faster and at lower cost, potentially altering the economics of the traditional outsourcing model. Infosys chief executive Salil Parekh said the company is seeing both opportunity and compression from AI, and described that tension as the main reason reflected in the new guidance.
Even so, the company’s latest quarter showed that AI-linked work is becoming a meaningful part of the mix. Infosys reported revenue of 492.4 billion rupees for the September quarter, helped in part by a weaker rupee, while net profit rose 6.3% to 78.2 billion rupees. The company said AI-related work accounted for 10.5% of sales. That came in broadly in line with, or slightly below, some analyst expectations for profit, but it was not enough to offset the softer outlook for the full year.
The new forecast also follows a difficult stretch for Indian IT stocks, with Infosys shares down around 30% this year as investors reassess the sector’s ability to navigate slower discretionary spending and the rise of generative AI. The pressure has been most visible in North America, where separate market analyses said revenue weakness has been especially pronounced in sectors such as high technology and retail. Infosys has also faced scrutiny from the Trump administration over its use of foreign workers, though Parekh said the company’s US hiring is mainly local and that the policy would not materially change its approach.
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