Infosys Targets 1.5-3.5% Growth for FY27 as Q4 Headcount Declines
Infosys shares experienced a significant decline of 6% in early trading on the New York Stock Exchange following the company’s revenue growth forecast for FY27, which is projected to be between 1.5% and 3.5%. Despite this cautious outlook, Infosys emphasized that underlying demand remains strong, even amid ongoing geopolitical uncertainties. The company’s operating margin guidance remains steady at 20% to 22%, reflecting its commitment to maintaining profitability.
Financial Performance Overview
In the March quarter, Infosys reported a year-on-year revenue increase of 4.1% in constant currency, although it saw a sequential decline of 1.3%. The total revenue for the quarter reached $5 billion, marking a 6.6% rise compared to the previous year. For FY26, the company achieved a revenue growth of 3.1% in constant currency, with dollar revenue totaling $20.1 billion, which is a 4.6% increase. This performance positioned Infosys second among its peers, trailing only HCLTech, which reported a 3.9% growth. The company concluded the fiscal year with an operating margin of 21%, demonstrating its ability to maintain profitability despite market challenges.
Large Deal Wins and Strategic Acquisitions
Infosys highlighted its robust performance in securing large deals, with total wins amounting to $14.9 billion. This success underscores the strength of its enterprise AI offerings and its growing market share in large transformation projects. CEO Salil Parekh noted that the company experienced growth in various sectors, including government, energy, utilities, and resources. He emphasized the positive trajectory of AI services and the strength of large deals, which accounted for 55% of net new business for the year. CFO Jayesh Sanghrajka explained that the growth of 3.1% for FY26 was achieved despite challenges such as a 1% decline in third-party revenue and a 70-basis-point impact from the onsite mix.
To enhance its capabilities, Infosys is pursuing strategic acquisitions worth up to $560 million, focusing on expanding its presence in the U.S. healthcare and insurance sectors. The company has completed the acquisition of Stratus, valued at up to $95 million, and is in the process of acquiring Optimum Healthcare IT for up to $465 million. These acquisitions aim to strengthen Infosys’s position in the provider segment and accelerate AI-led transformations.
Workforce Dynamics and Hiring Plans
In the latest quarter, Infosys reported a sequential decline of approximately 8,000 employees, although the total headcount increased by 5,016 year-on-year, bringing the total to 320,000 employees. The company attributed the decline to softer volumes, lower utilization rates, and seasonal factors rather than a structural slowdown. Parekh stated that Infosys is not restricting its hiring to a single skill set but is instead seeking talent with diverse capabilities, particularly in AI-related fields.
The company is also focusing on building a forward-deployed engineering team to collaborate more closely with clients on business and technology challenges. This initiative aims to facilitate the rapid development of AI-driven solutions. Infosys has been actively recruiting from campuses, adding over 20,000 fresh graduates in FY26 and planning a similar intake for FY27, reflecting its commitment to nurturing new talent in the evolving tech landscape.
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