Infosys reported its Q2 FY27 results, with revenue growth of 1.2% YoY in constant currency terms. AI revenue stood out at 10.5% of total revenue, growing 29% sequentially. The company secured $5.2 billion in large deal wins, including a net new $2 billion mega deal, and maintained its operating margin guidance at 20% to 22%.
Infosys Reports Q2 FY27 Financial Highlights
Infosys announced its financial results for the second quarter of Fiscal Year 2027 (Q2 FY27), highlighting robust performance in Artificial Intelligence (AI) and significant large deal wins. Total revenue for the quarter grew by 1.2% YoY and 1.2% sequentially in constant currency terms, reaching $5,145 million. This growth was attributed to a solid performance across various sectors, despite softer volumes and pricing pressures in some areas.
AI Revenue Surges Amidst Strategic Focus
A key highlight of the quarter was the exceptional growth in AI revenue, which now accounts for 10.5% of the company’s total revenue, marking a substantial sequential increase of 29%. This surge underscores Infosys’ strategic focus on AI and its growing adoption by enterprises. The company continues to invest in its Topaz Fabric and partnerships to support this accelerating trend.
Large Deal Wins Bolster Future Growth
Infosys secured significant large deal wins totaling $5.2 billion in Q2 FY27, the second highest quarterly TCV in the last five years. Notably, 62% of these wins were net new, including a $2 billion mega deal with a financial services client for a seven-year period, expected to contribute over 1% to revenue growth in FY28. Additionally, a $1 billion mega deal was renewed. The company also saw wins across Financial Services, Manufacturing, Communications, Life Sciences, and Hi-Tech sectors.
Margin Guidance Maintained Amidst Market Dynamics
Operating margin remained stable at 21% for the quarter. Infosys reaffirmed its operating margin guidance for the full year at 20% to 22%. While the company faces headwinds from compensation hikes and acquisition-related impacts, it expects these to be partially offset by initiatives under Project Maximus and currency tailwinds. Free cash flow generation was strong at $928 million.
Sectoral Performance and Outlook
The company experienced strong growth in Financial Services, Energy Utilities, Manufacturing, and Healthcare. However, the Hi-Tech and Retail sectors saw some softness due to lower discretionary spending and client-specific ramp-downs. Infosys revised its full-year revenue growth guidance to 1% to 2%, reflecting softer-than-expected H1 performance and an updated assessment for the rest of the year. The company remains focused on its AI strategy, large deal pipeline, and maintaining disciplined contract management.
Source: BSE
