Noisy quarter in 1QFY27: Revenue miss, organic growth guidance cut, new CEO announced

Research evidence excerpt

Noisy quarter in 1QFY27: Revenue miss, organic growth guidance cut, new CEO announced

Global Markets Research

Infosys INFY.NS INFO IN 23 July 2026

EQUITY: SOFTWARE & SERVICES

RatingNoisy quarter in 1QFY27 Remains Buy

Target price

Revenue miss, organic growth guidance cut, new CEO announced Reduced from INR INR 1,290 1,300

1QFY27 – revenue surprises negatively led by client-specific issue Closing23 July 2026price INR 1,047

Infosys’ revenue growth at +1% (+2.4% y-y) in constant currency or cc terms was lower than

our expectation of +1.5% q-q (consensus: +2% q-q). Revenue growth included ~110bp of Implied upside +23.2%

inorganic contribution. Infosys attributed the weakness to a one-off 50bp impact from a

program termination by a EURS client, softer volumes and lower-than-expected pricing Market Cap (USD mn) 43,928.2

increases. EBIT margin at 21.1% was better than our expectation of 20.5% (consensus: ADT (USD mn) 181.9

21.1%). Deal wins at USD3.6bn with net new at 61% (+5% y-y). EPS at INR19.2 (+15% y-y).

Relative performance chartFY27E organic growth guidance cut by 170bp at mid-point

Infosys changed its FY27E guidance from 1.5-3.5% (with 20bp inorganic) to 1.5-3% (with

170bp inorganic) in cc terms. In addition to the reasons behind the weak revenue in 1Q, an

additional factor was increased impact from a European manufacturing client now above 1%

(previously: 0.75-1%). The CFO noted the updated guidance reflects the volatile business

environment, with the lower-end assuming further macro deterioration and the top-end

assuming less improvement than initially projected. AI-led deflation remains a headwind,

particularly for large deal renewals, but this is being offset by net new business. AI services

revenue was 8.2% of total revenue in 1QFY27, growing double-digit q-q.