Infosys lowered its fiscal 2027 constant-currency revenue-growth guidance to 1%-2% from 1. 5%-3%, citing softer volumes, pricing pressure and weaker discretionary spending in some sectors. Operating margin held at 21%, while first-half revenue increased 1. 9% year over year in constant currency.
Chief Executive Salil Parekh said artificial-intelligence revenue reached 10. 5% of quarterly revenue, up 29% from the previous quarter, when it represented 8. Management said growth was spread across areas including AI agents, legacy modernization, process AI and data AI. The company is also working with model providers, training and certifying employees on different technologies, and using architecture teams to connect individual AI projects with broader client transformations.
Large-deal total contract value rose to $5. 2 billion in the quarter, with 62% classified as net new. Parekh identified two mega deals: a net-new agreement worth more than $2 billion over seven years with a large international company and a $1 billion renewal. The larger contract is expected to begin ramping toward the latter part of the fourth quarter and contribute more than 1% to revenue growth in the following financial year.
Management said financial services, energy and utilities, and manufacturing remained strong, while retail and high technology were weaker. Chief Financial Officer Jayesh Sanghrajka said competitive intensity, higher productivity demands and lower discretionary spending had pressured volumes and pricing. Infosys retained its full-year operating-margin guidance of 20%-22%, despite expecting compensation increases to weigh on margins in the second half.
Operational measures showed continued investment in capacity. Net headcount increased by about 4,000 in the quarter, and the company hired about 8,000 college graduates during the period, keeping its fiscal 2027 target near 20,000.
The quarter leaves Infosys balancing two contrasting trends: AI services and large contracts are expanding, but near-term client spending and pricing remain restrained. The company’s next growth test will be converting the new contract awards into revenue while absorbing planned compensation costs and the continuing pressure to deliver more productivity at competitive prices.