Infosys Q2 Results Preview: Better Earnings Than TCS, HCL, Tech Mahindra, Wipro? Interim Dividend Ahead

Infosys is set to declare its Q2 results for FY27 on October 23, the last one among the top 5 Indian tech players. In the quarter, Infosys is expected to report single-digit growth in constant currency revenue, while the Optimum Healthcare acquisition will contribute to the earnings. EBIT margins are likely to be stable. However, the majority of experts believe that Infosys will likely reduce its FY27 revenue growth guidance on Friday. Apart from this, the tech giant is also considering an interim dividend announcement.

Infosys Share Price Today

Ahead of the earnings, Infosys traded at Rs 1157 apiece, up by 0.5% on BSE with market cap of Rs 4,69,542.60 crore. The stock has touched an intraday high and low of Rs 1,198.30 and RS 1,037.15 respectively. Infosys is gaining despite market trend being bearish.

Infosys Q2 Results Preview:

"We forecast organic c/c revenue growth of 1.1%. About 50 bps of growth is due to the reversal of a headwind seen in the previous quarter. Underlying organic growth remains modest, reflecting AIled deflation and a weak demand environment. The Optimum Healthcare acquisition will contribute ~50 bps through a full-quarter consolidation," said analysts at Kotak Institutional Equities in their preview note.

Furthermore, they expect margins to be stable. There are several moving parts, with a ~50 bps headwind from the swing in provision for post-sales client support offset by the absence of the ~50 bps revenue reversal headwind seen in the previous quarter. Benefits from rupee depreciation are likely to be offset by weaker revenue growth.

Also, Kotak's analysts believe that Infosys will likely report a large deal TCV of $3 billion, stable on yoy comparison.

Along the similar lines, JM Financial analysts expect Infosys to report 1.2% cc QoQ growth, -20bps crosscurrency impact translates to a growth of 1% in USD terms. This includes ~0.5% contribution from Optimum acquisition and reversal in base of 50bps due to client termination. They also expect deal wins to be healthy - in line with usual trends. Run-rate for bookings expected to be $2.5-3 bullion. For margins, they predict it to increase by 30bps sequentially.

Overall, for Infosys earnings, the tailwinds are - Project Maximus, higher costs in base due to client termination. Headwind - investments in business.

"We expect INFO revenue to increase by 1.1% QoQ CC & 0.9% in USD terms due to one off project ramp downs in Q1 & 1 month of contribution from Optimum acquisition. On margins front, we expect EBIT margin to improve by 40bps QoQ as project maximus and some currency tailwinds largely being set off by amortisation expenses & AI investments," said analysts at PL Capital in their note.

However, Kotak also predicts that Infosys may cut its FY2027E revenue growth guidance to 1.5-2.5%. The revised guidance implies -0.7-0.6% CQGR in 3QFY27-4QFY27E. In addition to the usual seasonal weakness in 4Q, Infosys also has to contend with the ramp-down of a large automotive client.

Infosys Q2 Results: Key Factors To Watch Out

Here are some of the key factors to watch out in Infosys Q2 results, as per Kotak.

The reason for revenue growth underperformance in FY2027E.

2. Retention/ renewal of mega-deals won in the last few years.

3. The split of growth impact between macro weakness and AI-led deflation.

4. The pace of conversion of GenAI programs from pilots to scaled deployments and whether these represent net-new revenue or deflation of existing work.

5. Levers to defend margins amid elevated pricing pressure.

During Q1FY27, Infosys posted consolidated net profit of Rs 7,769 crore, registering a growth of 12.2% from net profit of Rs 6,921 crore in Q1FY26. But Q1 PAT declined by 8.6% QoQ from Rs 8,501 crore in Q4FY26.

Also, in Q1FY27, the consolidated revenue stood at Rs 48,211 crore, recording 14% YoY and 3.9% QoQ growth compared to revenues of Rs 42,279 crore in Q1FY26 and Rs 46,402 crore in Q4FY26. EBITDA stood at Rs 10,163 crore in Q1FY27, up by 15.4% YoY and 4.3% QoQ. While EBITDA margins are at 21.1%, expanding mildly from 20.8% in Q1FY26 and 21% in Q4FY26.

In Q1, for FY27 guidance, Infosys has cut its upper-end constant currency revenue growth guidance to 3% from the earlier 3.5%, while keeping the lower-end guidance unchanged at 1.5%. Also, EBITDA margin guidance for FY27 has been retained at 20-22%.

Infosys Interim Dividend:

Infosys will consider its first interim dividend of FY27. In the past 12 months, Infosys has paid up to Rs 48 dividend per share and carried a buyback for FY26.

Infosys Share Price Recommendations:

PL Capital has recommended BUY with a target price of Rs 1,300, while Kotak suggests ADD with target price of Rs 1,200 on Infosys.

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