Infosys share price declined 3.5% to its 52-week low of ₹1198.80 per share on BSE on Friday, 24 April, after the company reported its March quarter (Q4) results, following weak cues from the US trading session. Despite strong Q4 results, weak guidance led to cautious sentiment in the IT major.
The stock also came under pressure in the US markets, with its ADR falling 4% to around $12.94, reflecting investor concerns over the company’s near-term growth outlook despite a largely in-line quarterly performance.
Infosys, India’s second-largest IT services exporter, guided for FY27 revenue growth of 1.5% to 3.5% in constant currency terms, broadly aligning with analyst expectations but falling at the lower end of some projections. The company also maintained its EBIT margin guidance in the range of 20% to 22% for the full year.
Infosys Q4 Results Highlights
For Q4FY26, the company reported a 21% YoY increase in consolidated net profit at ₹8,501 crore, compared to ₹7,033 crore in the same quarter last year. Large deal wins during the quarter stood at $3.2 billion, within the guided range of $3 billion to $4 billion, though towards the lower end. EBIT margins expanded by 20 basis points, while EBIT came in slightly below Street expectations. Most other key metrics were largely in line with estimates.
Revenue for the quarter rose 13.4% YoY and 2% QoQ to ₹46,402 crore, compared with ₹40,925 crore in Q4FY25 and ₹45,479 crore in Q3FY26. On the operating front, EBITDA increased 13.6% YoY and 16.6% QoQ to ₹9,743 crore. Operating margin remained flat on a YoY basis but improved 2.6% QoQ to 21% during the quarter.
For the full financial year FY26, Infosys reported a 10.2% YoY rise in net profit to ₹29,440 crore, while revenue grew 9.6% YoY to ₹1,78,650 crore. Operating profit increased 5.3% YoY to ₹36,254 crore, though operating margins declined 0.8% YoY to 20.3%. Revenue growth in constant currency terms stood at 3.1% YoY.
Large deal bookings (above $30 million) came in at $3.2 billion during the quarter, lower than $4.8 billion in the previous quarter but higher than $2.6 billion in the year-ago period.
Alongside its earnings, Infosys announced a ₹25 per share”>final dividend of ₹25 per share for FY26. The company also confirmed June 10 as the record date for the dividend, with the payout scheduled for June 25. Earlier in October, Infosys had paid an interim dividend of ₹23 per share, taking the total dividend for FY26 to ₹48 per share.
What brokerages have to say post Q4
Brokerages remained constructive on Infosys despite a muted near-term outlook, highlighting that AI-led disruption, pricing pressure and cautious client spending are reshaping growth dynamics even as long-term fundamentals stay intact.
Brokerage house Motilal Oswal Financial Services has a BUY call on the stock with a target price of ₹1,450, implying ~17% upside. “Guidance reflects increasing pressure on existing book of business due to AI-led efficiencies, competitive intensity, and pricing pressure in a weak demand environment, with deflation likely to persist,” MOSL said.
It attributed the 1.5–3.5% FY27 guidance (1.25–3.25% organic CC) to compression in the core portfolio as productivity gains are passed on to clients, and expects ~2.5% organic growth, lower than FY26’s 3.1% CC, with FY27E/FY28E revenue growth estimated at 3.7%/3.9% YoY CC. MOSL also flagged deteriorating deal economics, noting Infosys is the second company this quarter to highlight deals being left due to untenable terms despite strong TCV of USD15 billion (+24% YoY; Q4 at USD3.2 billion).
“Deal economics are suffering as companies walk away from large contracts due to untenable terms and rising competitive intensity, signalling a shift toward leaner delivery models,” MOSL said. The brokerage cut FY27E/FY28E EPS by ~2–4% and PAT by 3–4%, factoring in AI-led pricing pressure and vertical headwinds in telecom and manufacturing, partly offset by lower taxes, while estimating EBIT margins at 20.9%/21.0%.
HDFC Securities also highlighted that Infosys reported a 1.3% QoQ CC revenue decline in Q4, slightly below estimates due to seasonality and slower client decision-making in March.
“The demand environment remains challenging as clients prioritise cost optimisation and operational resilience, while AI-led deflation in the existing portfolio offsets gains from high-value transformation programs,” HDFC Securities said. It noted that FY27 guidance factors in a client-specific ramp-down and lower onsite mix, with the lower end assuming a weaker macro environment, while trimming estimates by ~2–3% and maintaining a BUY with a target price of ₹1,550.
Furthermore, Elara Securities believes Infosys is entering FY27 with better clarity on client behaviour and decision-making compared to a year ago, which is a positive. The brokerage indicated that the company’s decision to walk away from margin-dilutive deals reflects a sharper focus on profitability, while revenue and EBITDA per employee remain among the best in the peer group.
It models 4.0%/3.5% USD revenue growth for FY27E/FY28E and 7.5% earnings CAGR over FY26–28E, cuts earnings estimates by 2–5%, and lowers its target price to ₹1,530 from ₹1,600, while maintaining a BUY rating.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
