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Business & Stocks Business Standard • Oct 26, 2026

Infosys Shares Drop 4% After Cutting FY27 Guidance to 1-2%; Brokerages Evaluate Valuations Amid Pricing Pressures and AI Shifts

💡 Key Takeaways

•Infosys shares dropped 4% after cutting its FY27 revenue growth guidance to 1-2% from 1.5-3%.
•Global brokerages including Goldman Sachs, Morgan Stanley, Citi, Nomura, and UBS revised target prices and ratings.
•Year-to-date, the stock remains down 31% amid pricing pressures and traditional IT sector headwinds.

NEW DELHI [NCRBuzz Wire] — **Infosys shares dropped 4% following a weaker-than-anticipated financial performance and a downward revision in its FY27 revenue growth guidance to 1-2% from 1.5-3%.** The downward correction reflects intensifying macroeconomic headwinds, pricing pressure, and cautious discretionary IT spending by global clients across key markets.

**Market capitalisation for the IT major contracted as institutional investors re-evaluated earnings visibility.** So far this year, Infosys shares remain 31 per cent lower amid an ongoing sector-wide selloff in traditional IT services companies, forcing analysts to re-assess long-term valuation multiples.

### Financial Performance Metrics and Guidance Revision

| :--- | :--- | :--- | :--- |

### Analyst Recommendations and Strategic Outlook

**Leading brokerages including Goldman Sachs, Morgan Stanley, Citi, Nomura, and UBS have adjusted their target prices and investment ratings following the management guidance cut.** While Nomura maintains a bullish stance, firms like Goldman Sachs and HSBC have flagged growth and margin concerns amid lengthening short-term deal conversion cycles in North American and European markets.

**Regulatory and compliance frameworks overseen by SEBI and RBI continue to monitor capital market stability amid high-frequency institutional trading shifts.** Market participants are advised to track upcoming macroeconomic indicators, Federal Reserve rate decisions, and enterprise IT budget allocations for subsequent quarters.

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🏛️ Background Context

Traditional Indian IT services firms have faced prolonged valuation adjustments as generative AI technologies and pricing pressures transform software development and enterprise budgeting.

💡 Citizen & Commuter Quick Explainer (FAQ)

Q1: Why did Infosys shares drop 4%?

Infosys shares dropped 4% following a downward revision in its FY27 revenue growth guidance to 1-2% from 1.5-3%, driven by persistent pricing pressure and cautious enterprise IT spending.

Q2: How have major brokerages responded to the guidance cut?

Global financial institutions including Goldman Sachs, Morgan Stanley, Citi, Nomura, and UBS have adjusted their target prices and investment ratings, reflecting varying stances on growth and margin outlooks.

Q3: What is the broader context impacting traditional IT services firms?

Traditional IT services firms are facing sector-wide valuation adjustments and margin pressures due to macroeconomic headwinds, lengthening deal cycles, and the transformative impact of generative AI.

Verified Wires: Business Standard, Economic Times Markets, Google News Business Original Wire Dispatch ↗

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