Infosys Cuts FY27 Revenue Guidance to 1.5–3%
Guidance was the main concern of investors. The company lowered its FY27 constant-currency revenue growth guidance to 1.5% to 3%, compared to the 1.5% to 3.5% range announced in April 2026.
Although the change looks small on paper, it signals that management has become more cautious about client spending over the coming quarters.
AI Business Grows, But Demand Concerns Remain
The company said AI-linked revenue contributed 8.2% of its total revenue during Q1 FY27.
Even so, investors remained worried about the near-term business environment. Weak client spending, AI-led pricing pressure and slower conversion of large deals into revenue continued to weigh on sentiment. Many investors believe that execution over the next few quarters will be crucial for Infosys to meet the revised guidance.
Infosys Share Price Performance
Following the results, the share price opened in the red. It opened lower at ₹1,028, compared with the previous close of ₹1,047.40. This translated to a fall of 1.85% at the opening bell.
Selling pressure built during the session, taking the stock to an intraday low of 1,019. At this level, the stock was down 2.71% as compared to its previous close.
Performance of IT Stocks in 2026 and Their PE Ratio
The Nifty IT Index has fallen more than 25% so far in 2026 and is down over 21% in the past year. The fall was a result of a sector-wide sell-off, fears of AI disruptions, and weak spending patterns in the industry.
Company
| 2026 Performance (YTD)
| 1-Year Return
| P/E Ratio
|
Nifty IT Index
| -25.48%
| -21.28%
| 18.39
|
Infosys Ltd
| -37.10%
| -33.96%
| 14.01
|
TCS Ltd
| -30.37%
| -28.61%
| 16.21
|
HCLTech Ltd
| -23.10%
| -16.61%
| 19.37
|
Tech Mahindra Ltd
| -4.01%
| 2.98%
| 29.51
|
Comparison of IT Major Results: Infosys vs TCS vs HCL Tech vs Tech Mahindra
While Infosys disappointed on guidance, its competitors also pointed out similar issues.
Key Takeaways
Company
| Q1 Highlights
| Market Takeaway
|
Infosys Ltd
| Profit grew, guidance reduced.
| Outlook turned cautious.
|
TCS Ltd
| Large AI deals, stable growth
| Strong enterprise pipeline
|
HCL Technologies Ltd
| Beat estimates, retained guidance
| Healthy execution
|
Tech Mahindra Ltd
| Improving margins and deal wins
| Turnaround continues
|
TCS Q1FY27 Results:
TCS generated US$7.62 billion in revenue for Q1 FY27, up 2.7% year-on-year, while constant currency revenue grew 0.4% sequentially, in line with market expectations, which ranged from 0.1% to 0.4%.
In rupee terms, revenue stood at ₹72,275 crore, marginally ahead of the market estimate of ₹71,847 crore, and higher than ₹70,698 crore reported in the March quarter.
The company continued to strengthen its AI portfolio by securing a US$800 million AI-led transformation deal with SKF, expanding its partnership with ServiceNow, signing a multi-million-dollar engagement with ABB and announcing a strategic partnership with Anthropic to accelerate enterprise AI adoption.
Despite this, EBIT fell 3% to ₹17,317 crore, slightly below the market estimate of ₹17,348 crore and lower than ₹17,870 crore reported in the previous quarter.
Hence, the results indicate that even industry leaders are facing margin pressure amid changing client spending patterns.
HCL Technologies Q1FY27 Results:
HCLTech, however, managed to beat market expectations across key parameters. Its consolidated net profit rose 20.3% YoY to ₹4,624 crore, beating the market estimate of ₹4,588 crore.
Revenue from operations increased 14% to ₹34,579 crore, higher than the market estimate of ₹34,338 crore and up from ₹30,349 crore reported a year ago. In dollar terms, revenue came in at US$3.65 billion, ahead of the market estimate of US$3.633 billion. Constant currency revenue fell 0.5% sequentially, outperforming the expected decline of around 1.1%.
The company retained its FY27 guidance, unlike Infosys, signalling confidence in business demand despite the uncertain environment. It also reported its highest-ever first-quarter net new bookings of US$2.4 billion, excluding a mega deal signed in early July. Management said the bookings were well diversified across sectors and geographies and included an AI-led transformation mandate from a Europe-headquartered Fortune Global 50 company.
The company's ability to beat estimates while maintaining its guidance was notably different from Infosys, which lowered its revenue outlook for FY27. In fact, HCLTech emerged as one of the strongest performers among large-cap IT companies this quarter.
Tech Mahindra Q1FY27 Results:
Tech Mahindra reported a mixed quarter. Consolidated revenue rose 4.2% sequentially to ₹15,711.9 crore, surpassing the market estimate of ₹15,486 crore. In dollar terms, revenue stood at US$1.66 billion, slightly ahead of the market estimate of US$1.64 billion, while constant currency revenue grew 2.6% QoQ, significantly stronger than the expected growth of around 1%.
However, net profit came in at ₹1,486.3 crore, below the market estimate of ₹1,694 crore, despite increasing 9.8% sequentially from ₹1,354 crore in the previous quarter. The company also reported its fourth consecutive quarter of margin expansion, with EBIT margin improving to 14.4% from 13.8% in the March quarter and 11.1% a year earlier.
It reported US$1.078 billion in new deal wins during the quarter, up 33.3% year-on-year, marking the third consecutive quarter in which deal wins exceeded US$1 billion.
The company continues to maintain steady operational progress. The high rate of revenue growth, margin improvement, and securing of billion-dollar deals indicates improved business momentum. But the failure to meet profit forecasts shows that earnings have not yet captured the impact of momentum.
Conclusion
The larger IT industry is experiencing similar structural issues from pricing pressures driven by AI to delayed client spending. But the market is valuing firms with the ability to stay on track for growth.
For Infosys and other IT firms, the coming quarters will not be about delivering yet another profit-making quarter, but rather about demonstrating their ability to leverage the AI investments and the large number of deals they have won to drive revenue growth.
That, more than the numbers, is likely to determine where the stocks head next.
