Infosys Q2 Profit Climbs 6% YoY to Rs 7,823 Cr as Revenue Guidance Cuts to 1‑2%
On Friday, Infosys Ltd. (NSE:INFY) released its second‑quarter results for FY27, reporting a 6.23% year‑on‑year increase in consolidated net profit to ₹7,823 crore, compared with ₹7,364 crore in the same period a year earlier. The company also announced an interim dividend of ₹26 per share, a 25% payout ratio, and revised its FY27 revenue growth guidance to 1‑2% in constant currency, down from the previously forecast 1.5‑3% band.
Market Background
The Indian equity market opened on a positive note, buoyed by a surge in AI‑related stocks and inflows into the Jio Platforms IPO. The benchmark Nifty 50 finished the day up 800 points from its intraday high, while the Nifty IT index rose 1.5%, reflecting optimism in the technology sector. However, foreign institutional investors (FIIs) continued to net sell, citing concerns over global monetary tightening and a weaker rupee, which gained 3 paise to ₹94.78 against the dollar amid an oil price surge.
In the broader macro context, the Reserve Bank of India (RBI) maintained its repo rate at 6.50%, signalling a cautious stance amid rising inflationary pressures. SEBI’s recent guidelines on enhanced disclosure for listed companies also added to the regulatory backdrop, prompting companies to provide more granular data on earnings and guidance.
Key Developments
| Metric | Value | Signal |
|---|---|---|
| Consolidated Net Profit | ₹7,823 crore | Bullish |
| YoY Profit Growth | 6.23% | Bullish |
| Q2 Revenue | ₹10,150 crore | Bullish |
| YoY Revenue Growth | 11% | Bullish |
| FY27 Revenue Guidance | 1‑2% (constant currency) | Neutral |
| Dividend per Share | ₹26 | Bullish |
Infosys’ earnings beat the consensus estimate of ₹7,700 crore, with analysts citing a robust demand for its cloud and automation services. The 11% revenue growth was underpinned by a 12% uptick in the Americas segment and a 9% rise in the European market, offset by a 5% decline in the Indian domestic segment. The company’s CEO, Salil Parekh, highlighted the importance of “generative AI” deals but noted pricing pressure in the GenAI space, prompting a more conservative revenue outlook for FY27.
Sector Impact
The IT services sector saw a mixed reaction. While Infosys’ profit growth buoyed the Nifty IT index, the guidance cut tempered expectations for the sector’s top‑line trajectory. Companies such as TCS and HCL Technologies, which also reported Q2 results earlier in the week, faced similar headwinds, leading to a modest 0.3% decline in their shares. Investors are closely watching the performance of AI‑enabled services, as the sector’s growth is increasingly tied to the adoption of generative AI solutions.
Macro & Regulatory Context
The RBI’s decision to hold rates steady aligns with its objective to keep inflation near the 4% target, while SEBI’s new disclosure norms require listed companies to provide quarterly updates on ESG metrics, potentially impacting investor sentiment. Global factors, including the US Federal Reserve’s tightening cycle and a rebound in oil prices, continue to exert downward pressure on the rupee, which could affect the cost structure of IT exporters.
What to Watch
- Upcoming earnings: HCL Technologies (Q3 FY27) on 15 November and TCS (Q3 FY27) on 22 November.
- Policy meetings: RBI Monetary Policy Committee (MPC) on 30 November.
- Data releases: PMI for the services sector on 5 November and the Consumer Price Index (CPI) on 12 November.
Disclaimer: This article is for information only and is not investment advice. Markets involve risk; consult a SEBI‑registered adviser before acting.
