Infosys Slides 5% Post Results, Weak Guidance Offsets Profit Growth

Shares of Infosys declined nearly 5% in early trade on Friday after the company's March quarter results and FY27 guidance failed to impress investors.

The stock fell as much as 4.87% to ₹1,180.90 on the National Stock Exchange, reflecting cautious sentiment despite a strong profit performance.

Infosys reported a 20.8% year-on-year rise in consolidated net profit to ₹8,501 crore for Q4 FY26. On a sequential basis, profit increased 27.8%, supported by improved operating performance.

Revenue for the quarter stood at ₹46,402 crore, up 2% sequentially and largely in line with expectations. At the operating level, EBIT rose 16.6% quarter-on-quarter to ₹9,743 crore, with margins expanding to 21% from 18.4% in the previous quarter.

Profit before tax increased 17% sequentially to ₹10,797 crore, while earnings per share came in at ₹21.01. The company also announced a final dividend of ₹25 per equity share for FY26.

Guidance Caps Upside Despite Strong Q4

Despite the healthy earnings performance, investor sentiment remained weak due to subdued growth guidance. Infosys has projected FY27 revenue growth in the range of 1.5% to 3.5% in constant currency terms, indicating a cautious outlook amid macroeconomic uncertainties.

Management indicated that while the year started on a strong note, the global economic environment has become more uncertain, partly due to geopolitical tensions in West Asia, although conditions are showing signs of stabilisation.

The company expects growth to be supported by segments such as financial services, utilities and AI-led services.

Brokerages See Limited Upside Near-term

Nomura said the quarter saw a marginal revenue miss but a modest margin beat, with FY27 guidance broadly in line at the midpoint. It expects margins to remain stable at around 21% and sees growth supported by BFSI and Europe segments along with AI-led deals.

HSBC noted that Q4 performance was slightly softer than expected, while the guidance reflects recent weakness in sector demand. It added that achieving the upper end of the guidance band could indicate a recovery in demand in the first half of FY27.

The brokerage also highlighted that the stock is trading near five-year lows despite strong earnings growth in recent years.

The combination of cautious guidance and lingering macro uncertainties outweighed the strong quarterly performance, leading to a decline in Infosys shares.