Infosys shares slump over 4.5%, post biggest single day fall in nearly three months

Shares of Infosys, the country's second largest information technology (IT) services company, dropped as much as 4.51%, its biggest single day fall since June 19, to an intraday low of ₹1,033 on the National Stock Exchange.

The stock was mirroring a weak trend in other IT shares on rising expectations that American corporations would cut down on their discretionary spending after stronger than expected August payrolls data from the United States increased chances of a rate hike by the Federal Reserve at its FOMC meeting due later this month, analysts noted.

US clients of Indian IT companies may cut technology budgets owing to a jump in the borrowing cost for them so they may postpone their discretionary spending, reduce consulting spending or renegotiate with IT companies on the contracts, analysts added.

US is the biggest market for the Indian IT companies as they earn significant amount of revenue from there.

Meanwhile, global investment firm JPMorgan in a note said that AI inflation is some time away for Infosys. AI inflation for IT companies refers to the rising operational costs driven by the massive demand for adoption of artificial intelligence (AI) infrastructure.

JPMorgan added that competitive intensity has risen in vendor consolidation deals and Infosys has delivered steady margins with gains from Project Maximus.

Infosys Q1 earnings

Infosys reported a nearly 9% quarter-on-quarter (QoQ) drop in consolidated net profit at ₹7,769 crore for the quarter ended June 30, 2026 (Q1 FY27) as compared to ₹8,501 crore in the last quarter of the previous fiscal year.

On a year-on-year basis, the country’s second-largest IT services company’s net profit rose 12.2% from ₹6,921 crore.

The company's revenue in the April-June period gained 3.8% QoQ to ₹48,211 crore from ₹46,204 crore seen in the previous quarter (Q4 FY26).

Earnings Before Interest and Tax (EBIT) came in at ₹10,163 crore, marking a sequential growth of 4.3% as against ₹46,402 crore reported in the previous quarter. The EBIT margin for the quarter improved to 21.08%, up from 20.99% seen in the March quarter of FY26.

In constant currency terms, the IT firm delivered $5,082 million in revenues for the quarter under review, marking a yearly growth of 2.4% and a sequential increase of 1%.

Infosys’ free cash flow (FCF) stood at $0.96 billion at the end of Q1 FY27. Additionally, its AI-led initiatives contributed 8.2% to the company’s overall revenue during the quarter.

As of 2:10 pm, Infosys shares traded 4.32% lower at ₹1,035, underperforming the NIFTY50 index which was down 0.4%. The stock was top loser in the NIFTY50 index.