Infosys Ltd. FALLS AFTER Q2 EARNINGS MISS

Infosys shares declined on Monday, emerging among the top losers on the Nifty 50, after the IT services major reported weaker-than-expected second-quarter earnings and cut its FY27 revenue growth guidance. Brokerages UBS and HSBC offered contrasting views on the stock, with UBS forecasting a potential upside of 23 percent, while HSBC highlighted concerns over revenue growth and margin pressures. The stock was trading 1 percent lower after falling as much as 4 percent during early trade. The decline extended Infosys’ year-to-date losses to 30 percent, significantly underperforming the Nifty 50, which had fallen 13.5 percent over the same period. The company’s market capitalisation stood at approximately Rs 4.6 lakh crore. For the September quarter, Infosys reported a 6.2 percent year-on-year rise in consolidated net profit, while revenue increased 10.7 percent. Operating profit grew 10.4 percent but fell short of market expectations. Operating margin also contracted by 10 basis points sequentially to 21 percent. The company revised its FY27 constant-currency revenue growth guidance downward to 1–2 percent from the earlier projection of 1.5–3 percent. However, it retained its operating margin guidance at 20–22 percent. Despite the weaker outlook, Infosys reported an improvement in large deal wins, securing contracts worth $5.2 billion during the quarter, up from $3.6 billion in the preceding quarter. Net-new deals accounted for 62 percent of the total contract value. The company also reported strong momentum in artificial intelligence services, with AI revenue rising 29 percent sequentially. The segment’s contribution to total revenue increased to 10.5 percent in the September quarter, compared with 8.2 percent in the June quarter.