Infosys ADR slides after Q1 profit drop and trimmed FY27 revenue guidance
Infosys American Depositary Receipts fell sharply after the Indian IT giant reported a sequential decline in first-quarter net profit and lowered its full-year revenue growth outlook, signaling potential headwinds for the sector.
Infosys American Depositary Receipts dropped more than 5 percent in US trading following the release of its first-quarter results and a reduction in its full-year revenue growth guidance. The shares declined as much as 5.76 percent to $10.30 on the New York Stock Exchange on Thursday, before settling 2.01 percent lower at $10.71. These receipts allow the company’s foreign shares to trade on US exchanges, making the sell-off a direct indicator of international investor sentiment.
The Indian technology major reported a sequential decline in net profit for the quarter ended June 2026. Earnings fell 8.6 percent to ₹7,769 crore, down from ₹8,501 crore in the preceding March quarter.
Despite the profit drop, top-line growth remained marginally positive. Revenue increased 3.9 percent sequentially to ₹48,211 crore, translating to a 0.8 percent rise to $5.08 billion in dollar terms. Constant currency revenue growth stood at 1 percent quarter-on-quarter.
Reflecting a cautious outlook, the company narrowed its constant currency revenue growth guidance for fiscal year 2027. The new target range is 1.5 percent to 3 percent, revised down from the previous upper bound of 3.5 percent. However, Infosys maintained its operating profit margin guidance at 20 percent to 22 percent.
On the operational front, earnings before interest and taxes for the quarter rose 4.3 percent quarter-on-quarter to ₹10,163 crore. The corresponding EBIT margin expanded by 20 basis points to reach 21.1 percent.
In a major corporate development, the company announced that Chief Executive Officer and Managing Director Salil Parekh will step down. His departure will take effect on April 1, 2027, concluding a tenure of nearly nine years at the helm.
This combination of softer profit, trimmed guidance, and impending leadership transition raises critical questions for institutional investors monitoring the Indian technology sector. As global enterprise technology spending faces closer scrutiny, the revised growth ceiling suggests that major vendors are bracing for a more constrained demand environment. Maintaining the EBIT margin guidance will be a key test for management as they navigate this leadership change and a potentially slower growth trajectory.
