Infosys shares tank 7% after earnings announcement; market valuation drops by Rs 35,746 crore

New Delhi: Shares of IT major Infosys on Friday slumped 7 per cent after its revenue growth forecast for FY27 came in lower than market expectations.

The stock declined 7.09 per cent to settle at Rs 1,154.45 on the BSE. During the day, it dropped 7.26 per cent to hit a 52-week low of Rs 1,152.35.

At the NSE, the stock tanked 6.93 per cent to Rs 1,154.60.

The company's market valuation declined by Rs 35,746.38 crore to Rs 4,68,201.44 crore.

As per a report by JM Financial Institutional Securities Limited, Infosys reported 4QFY26 results – revenue and margins were below expectations.

"Forward-looking indicators – Infosys guided for 1.5 per cent-3.5 per cent YoY cc revenue growth for FY27 (includes 20-25bps of acquisition), lower than our expectation of 2 per cent to 4 per cent, margin guidance was in-line at 20-22 per cent," it said.

Infosys on Thursday reported a 20.8 per cent rise in consolidated net profit to Rs 8,501 crore in the January-March quarter and guided for 1.5 to 3.5 per cent revenue growth for FY27, pinning its optimism on momentum in financial services, utilities, and AI services.

The top management spoke of the calendar year starting on a strong note, but pointed out that there was a "change in economic environment" amid the West Asia conflict, though things appear to be stabilising now.

The company's revenue from operations increased 13.4 per cent to Rs 46,402 crore in Q4 FY26 compared to Rs 40,925 crore in the year-ago period.

In the full 2025-26 fiscal year, Infosys' net profit climbed 10.20 per cent to Rs 29,440 crore from Rs 26,713 crore in 2024-25.

Its revenue from operations in FY26 rose 9.6 per cent to Rs 1,78,650 crore.

For FY27, Infosys has given a revenue growth forecast of 1.5 to 3.5 per cent in constant currency terms.

"We had strong growth in financial services, in communications, and in manufacturing from the industry side and in Europe from the geography side. As we look ahead to the financial year 2027, we see large opportunities in AI services. We expect acceleration of growth in financial services and in the energy, utility, resources and services vertical.

"With the Iran war, there was a change in the economic environment…(but) there seem to be paths towards things stabilising. What we understand, (through) talking to people in the market and the clients, is that the underlying resilience of some of the economies where we have big markets is pretty good. The economies are doing well. There are good investments. AI is growing well," Infosys CEO and MD Salil Parekh said.

"Guidance for FY27 is maintained at 1.5-3.5 per cent YoY cc (vs. our expectation of 1.5-4.5 per cent YoY cc)," according to Motilal Oswal Financial Services.

Infosys guidance of 1.5–3.5 per cent is below our estimates at the top end, and it tells us that AI is now compressing the existing book of business, it added.

Massive selling was also there in other IT stocks. HCL Technologies dived 5.83 per cent, Tata Consultancy Services tanked 4.77 per cent, Tech Mahindra dropped 4.04 per cent, and Wipro dipped 1.68 per cent on the BSE.

The BSE IT index declined 5.13 per cent to 27,648.74.

The 30-share BSE Sensex dropped 999.79 points or 1.29 per cent to settle at 76,664.21. The NSE Nifty slumped 275.10 points or 1.14 per cent to end at 23,897.95.