India — Infosys Cuts Fiscal 2027 Revenue Growth Forecast as AI Competition Pressures IT Sector
India’s Infosys faced renewed market pressure on Monday after lowering its revenue growth outlook for fiscal 2027, underscoring the difficulties traditional IT services providers are encountering as artificial intelligence reshapes the industry.
Shares of the software exporter dropped 2.7% following the announcement. The revised forecast reflected mounting competition, customer expectations for greater productivity and subdued technology spending in key markets.
Infosys lowered its fiscal 2027 revenue growth guidance to between 1% and 2%, down from its previous range of 1.5% to 3%. Most analysts had anticipated a more modest revision, with the upper end of the forecast expected to fall only to 2.5%.
The reduction placed Infosys among the latest major Indian IT companies facing investor scrutiny over their growth prospects.
The company was the last of India’s five largest IT services providers to report earnings for the sector. Earlier in October, Tata Consultancy Services and HCLTech met revenue expectations, while investors welcomed increases in revenue associated with artificial intelligence.
The differing results prompted questions about Infosys’ competitive standing.
LKP Securities analyst Anshul Jethi said competitors were in a stronger position than Infosys at that point, adding that the stock’s reaction reflected the company’s relative performance.
Artificial intelligence is putting pressure on traditional outsourcing models in several ways. Customers increasingly expect service providers to complete more work with fewer resources, intensifying pressure on prices and conventional revenue growth.
Meanwhile, some companies are establishing their own global capability centres, or offshore technology operations, rather than outsourcing those functions to providers such as Infosys.
Systematix analysts characterized the quarter as disappointing, citing tougher competition, pricing pressure and weak technology spending among retail and high-tech customers.
Other analysts pointed to additional challenges. Motilal Oswal highlighted weaker volumes, price increases that fell short of expectations, a shift toward offshore delivery and Infosys’ decision to exit a major European manufacturing contract.
TD Cowen said macroeconomic uncertainty, AI-driven productivity demands and rising competition had weighed on pricing and volumes. Seasonal weakness and lower client activity could also constrain growth in the second half of the fiscal year.
The wider industry faces a complex challenge as artificial intelligence creates new business opportunities while threatening established revenue streams. IT providers can secure projects involving AI implementation, but customers may also use automation to reduce the labour needed to fulfil existing contracts.
For Infosys, how effectively it balances these competing forces will be a key factor in determining its future growth.
Despite the lower forecast, analysts maintained an average Buy rating on the stock. Data compiled by LSEG showed a median price target of 1,180 rupees.
Infosys shares were last down 1.5% at 1,136 rupees as of 10:53 a.m. Indian Standard Time. The Nifty IT index declined 0.2%, while the benchmark Nifty 50 gained 0.16%.
The contrasting movements indicated that selling pressure was concentrated more heavily in technology stocks than across the broader Indian equity market.
Investors will now assess whether Infosys can strengthen demand, defend its pricing and secure sufficient AI-related business to compensate for pressure on its traditional services operations.
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