Infosys shares fell 6% in early NYSE trade after the company forecast broad-based revenue growth of 1.5% to 3.5% for FY27, while maintaining that underlying demand remains resilient despite geopolitical uncertainty. Its operating margin guidance remains unchanged at 20%-22%.
Quarterly and Annual Performance
For the March quarter, revenue grew 4.1% year-on-year in constant currency but declined 1.3% sequentially. In dollar terms, revenue stood at $5 billion, up 6.6% YoY. For FY26, revenue rose 3.1% in constant currency, while dollar revenue came in at $20.1 billion, marking a 4.6% increase. The company's growth ranked second among peers, behind HCLTech's 3.9%. It ended the year with an operating margin of 21%.
Large Deal Wins and AI Services
Infosys reported strong large deal wins of $14.9 billion, underscoring the strength of its enterprise AI value proposition and gains in market share across large transformation opportunities. "We saw growth in FY26, with strength in government, energy, utilities and resources. AI services are growing well, and large deals remain strong, with net new at 55% for the full year, supporting future growth," said CEO Salil Parekh. "At the same time, we continue to see the compression discussed earlier in our AI briefing, with no material change from last quarter."
CFO Jayesh Sanghrajka said FY26 growth of 3.1% came despite a 1% drag from lower third-party revenue and a 70-basis-point impact from onsite mix, and should be viewed in that context. On FY27 guidance, of the three transactions announced last year, the Stratus insurance acquisition has closed and is included, contributing about 25 basis points. The Optimum acquisition and a joint venture with an Australian client are yet to close and are not factored in.
Acquisitions and Margin Details
Infosys is strengthening its healthcare and insurance capabilities through acquisitions worth up to $560 million to expand its US footprint. It is acquiring Optimum Healthcare IT for up to $465 million to deepen its presence in the provider segment, and Stratus for up to $95 million to bolster its property and casualty insurance capabilities and accelerate AI-led transformation. On margins, Sanghrajka said: "Quarter on quarter, margins saw a 50-basis-point impact from acquisition-related amortisation and a 30-basis-point headwind from the absence of a one-off Q3 benefit. There was also a 20-basis-point impact from compensation-related factors, partly offset by a 40-basis-point currency tailwind and around 30 basis points from operational performance."
Headcount and Hiring Plans
Headcount declined by about 8,000 sequentially in the quarter but rose by 5,016 year-on-year to close the year at 3.2 lakh employees. The company attributed the decline to softer volumes, lower utilisation and seasonality, rather than any structural slowdown. Parekh said the company is not limiting hiring to a single skill profile but bringing in talent with varied capabilities, including AI-aligned skill sets with differentiated starting compensation. He said Infosys is also building a forward-deployed engineering team to work more closely with clients on business and technology challenges, enabling faster development of AI-led solutions. Infosys continues to hire aggressively from campuses, adding over 20,000 freshers in FY26 and planning a similar intake in FY27.
