Infosys has had the worst start to a calendar year, having declined 38% in the first six months of 2026, even more than the 37% it declined during the global financial crisis of 2008.
Analysts tracking the company have warned that Infosys is likely to lower the upper end of its FY27 revenue growth guidance when it reports its June-quarter results, as brokerages believe a gradual recovery in demand no longer supports the company’s current outlook.
The IT services major had guided for constant currency revenue growth in financial year 2027 to be between 1.5%-3.5%. However, most brokerages now expect the upper end of the guidance to be cut by 50 basis points – 100 basis points.
Motilal Oswal expects the company to revise its guidance to 1.5%-3%, while Morgan Stanley forecasts a narrower 1%-2.5% range. Citi also expects the upper end of the guidance to be lowered by 50 basis points – 100 basis points.
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On the flip side, some brokerages expect Infosys to retain a higher reported growth outlook after factoring in recent acquisitions.
Jefferies and BofA expect revenue growth guidance of 2.5%-4.5%, including contributions from the acquisitions of The Missing Link (formerly Optimum) and MRE Consulting (formerly referred to as Stratus), which are expected to add 100-150 basis points to revenue growth.
Morgan Stanley expects Infosys to deliver 3% year-on-year constant currency revenue growth in FY27, including around 2 percentage points from acquisitions. This implies organic growth of about 1%, weaker than the approximately 2.4% organic growth reported in FY26.
Despite the weaker growth outlook, brokerages expect Infosys to maintain its FY27 operating margin guidance of 20%-22%.
Valuation remains another area of concern. Goldman Sachs noted that the Indian IT sector is trading at around 14 times 12-month forward earnings, representing a 90% premium to global peers such as Accenture, Cognizant and Capgemini, whose average forward valuation stands at about 8 times.
The brokerage said the premium appears difficult to justify given expectations of only low single-digit growth. Morgan Stanley added that during the 2015-17 slowdown, large-cap Indian IT stocks bottomed out at 11-13 times two-year forward earnings, suggesting there could still be room for further downside.
Infosys shares were trading 1.1% down on Wednesday, at ₹990.60. The stock has fallen 38% so far this year and currently trades at around 12.5 times FY28 estimated earnings, according to the brokerage notes.
