April 24 (Reuters) – Shares of Infosys fell as much as 4.2% to their lowest level in three years on Friday after the firm forecast disappointing fiscal 2027 revenue growth, as AI-led spending caution and geopolitical tensions weigh on India’s $315 billion IT sector.
India’s No. 2 IT services exporter’s shares were trading at 1,188.50, their lowest level since April 2023. The stock was the second-biggest loser on the Nifty IT index, trailing LTM, which was down 4.87% after it marginally beat fourth-quarter expectations.
The weak outlook sent U.S.-listed shares of Infosys down 6% overnight.
Infosys was the second Indian IT firm after HCLTech’s to flag heightened competitive intensity amid AI-driven spending caution and macroeconomic headwinds, prompting a more selective approach to deal participation.
Industry leader Tata Consultancy Services earlier posted its first annual revenue decline in more than two decades.
Analysts at BofA said Infosys and HCL forecasts indicate that revenue growth will take longer to accelerate than previously expected, though, like other companies, it said the shortfall was not due to demand.
However, Infosys did outperform peers in converting bookings into revenue despite macro volatility and its AI portfolio should support stable mid-single-digit growth over the next five years, Morningstar analysts said.
At least seven brokerages cut their price targets, while Nomura increased its PT expectations by 10 rupees to 1,640 rupees.
Infosys expects fiscal 2027 constant-currency revenue growth of 1.5%–3.5%, below analysts’ expectations of around 2%–4%, as it factors in weakness in the manufacturing vertical, particularly in Europe’s auto sector.
(Reporting by Urvi Dugar in Bengaluru; Editing by Harikrishnan Nair)
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