Infosys Adjusts Forecast as Indian Markets Navigate Recent Volatility
Infosys lowered its full-year revenue growth outlook following subdued volumes and pricing pressure, while broader Indian stock markets faced recent sessions of losses.
Indian stock markets experienced downward pressure over recent trading sessions, with major indices recording consecutive declines influenced by sectoral losses, rising crude oil prices, and foreign investor outflows. The Sensex and Nifty indices both saw notable pullbacks during October trading, weighed down by weakness in IT, banking, media, and energy shares.
Amid these broader market headwinds, major technology firms have continued to release corporate updates and earnings reports. Infosys, India's second-largest IT services provider, reported second-quarter revenue that broadly met analyst expectations but nevertheless adjusted its annual financial forecasts for the 2027 fiscal year.
American Depositary Receipts of Infosys slumped significantly in pre-market trading after the company lowered its FY27 revenue growth forecast to a range of 1 to 2 percent, down from its earlier projection of 1.5 to 3 percent. Despite the lowered revenue outlook, the firm maintained its EBIT margin guidance at 20 to 22 percent.
Addressing the adjustment during an interview, Chief Financial Officer Jayesh Sanghrajka explained that the revised growth forecast reflects a softer second quarter, subdued volumes, intense pricing pressure, and higher productivity expectations from clients. Weakness in the retail and high-tech sectors, where discretionary spending has remained lower than anticipated, also weighed on the projections.
Sanghrajka noted that the company successfully maintained its operating margin at 21 percent, supported by ongoing cost-efficiency measures under Project Maximus. This stability was achieved despite continued investments in sales, marketing, artificial intelligence, and talent development.
Looking toward the remainder of the financial year, the company anticipates that employee compensation costs and sustained pricing pressure will continue to challenge margins. However, executives stated that the firm will rely on Project Maximus to mitigate these headwinds.
On the domestic exchanges, shares of Infosys ended nearly flat on the National Stock Exchange on Friday, October 23, closing with a modest gain of 0.04 percent at 1,153.80 rupees. The stock has experienced mixed momentum recently, rising about 13.1 percent over the past month while remaining down overall for the year.
Meanwhile, stock exchanges continue to utilize established mechanisms such as upper and lower circuit limits to manage volatility and protect investors from drastic price swings. These fixed boundaries help prevent sudden market crashes caused by panic selling or excessive price hikes during periods of economic uncertainty.