Infosys shares fell 4% at the opening bell on Monday, October 26, as investors reacted to the company’s conservative revenue growth guidance for FY27. The stock touched an early market low of ₹1,107, down from ₹1,153.80 at the previous close. Trading volume exceeded 5 million equity shares, reflecting heightened volatility in the market and a muted sequential performance in Q2. The decline impacted overall sentiment among Indian IT stocks, with the Nifty IT index falling 2.5% during the early trade.

The Nifty IT index slipped 2.53%, or about 810 points, to 31,184.70 on October 26, compared with 31,995.50 at the prior close. Infosys had announced its Q2 earnings after market hours on Friday, October 23, and the market responded to the guidance cut. Analysts from Goldman Sachs noted a second consecutive quarter of guidance cut, with the mid‑point now implying modest negative FY27 organic revenue growth. They highlighted pricing pressure and a sluggish demand environment as key factors.

Goldman Sachs analysts added that margins remain range‑bound, citing elevated competition and client‑specific ramp‑downs. HSBC analysts agreed that H2 FY27 margins are likely to stay under stress due to wage hikes. UBS analysts reported that the Q2 performance was weaker than expected. Citibank commented that a new mega deal should address concerns about Infosys starting FY28 at a disadvantage relative to peers after losing a European manufacturing client.

Infosys management lowered its revenue guidance to a range of 1% to 2% for FY26‑27, down from the earlier forecast of 1.5% to 3%. Despite the conservative outlook, the company maintained its operating margin guidance at 20% to 22% for the current fiscal year. CFO Jayesh Sanghrajka said the firm delivered operating margins of 21.0% in Q2 amid heightened volatility, focusing on cost and operational efficiency measures while making required investments.

On a sequential basis, Q2 earnings advanced only 0.7% to ₹7,769 crore from ₹7,769 crore in Q1 FY27, while YoY net profit rose 6% to ₹7,823 crore from ₹7,364 crore a year earlier. Revenue from core operations increased 11% YoY to ₹49,244 crore and grew 2.14% sequentially. Artificial intelligence revenues contributed 10.5% to total revenue in the September quarter, recording a 29% QoQ growth.

The company also announced an interim dividend of ₹26 per share for all eligible shareholders up to the predetermined record date of the corporate action. The market reaction underscored investor sensitivity to guidance revisions and the broader impact of market volatility on the Indian IT sector. The decline in Infosys shares and the Nifty IT index reflected a cautious stance among investors amid the sector’s muted earnings outlook.