Infosys Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Infosys Ltd filed with BSE on 28 Jul 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Infosys reported Q1 FY27 revenue growth of 2.4% year-on-year and 1% quarter-on-quarter in constant currency, with operating margin at 21.1% and free cash flow of $955 million. Management cut its full-year revenue growth guidance to 1.5%-3% in constant currency, citing a one-time client program termination, softer volumes, and pricing pressure from AI-driven productivity demands, while maintaining operating margin guidance of 20%-22%. The company also announced that CEO Salil Parekh will be succeeded by Ashiss Dash effective April 1, 2027, following a transition period.
Numbers mentioned
Revenue growth: 2.4% Y-on-Y and 1% Q-on-Q in constant currency (Q1 FY27)
p. 5
“Our revenue growth for Q1 was at 2.4% Y-on-Y and 1% Q-on-Q in constant currency terms.”
Salil Parekh, page 5 of the filed PDF · View the filing
AI services revenue: 8.2% of overall revenue (Q1 FY27)
p. 5
“Our AI services revenue was 8.2% of overall revenue in Q1.”
Salil Parekh, page 5 of the filed PDF · View the filing
Large deal TCV: $3.6 bn at 61% net new (Q1 FY27)
p. 5
“Our large deals, $3.6 bn at 61% net new, operating margin at 21.1%, free cash flow at $955 mn.”
Salil Parekh, page 5 of the filed PDF · View the filing
Operating margin: 21.1% (Q1 FY27)
p. 5
“Our large deals, $3.6 bn at 61% net new, operating margin at 21.1%, free cash flow at $955 mn.”
Salil Parekh, page 5 of the filed PDF · View the filing
Earnings per share growth: 15% Y-on-Y in rupee terms (Q1 FY27)
p. 5
“Earnings per share were up 15% Y-on-Y in rupee terms.”
Salil Parekh, page 5 of the filed PDF · View the filing
Revenue: $5,082 mn (Q1 FY27)
p. 30
“Q1 revenues were at $5,082 mn, increase of 1% sequentially and 2.4% Y-on-Y in constant currency terms.”
Jayesh Sanghrajka, page 30 of the filed PDF · View the filing
Utilization excluding trainees: 84.9% (Q1 FY27)
p. 31
“Our tight focus on improving operational efficiency led to utilization, excluding trainees, improving by 1.9% to 84.9%.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
DSO: 63 days (Q1 FY27)
p. 31
“DSO reduced by 4 days sequentially to 63.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Attrition: 13% (Q1 FY27)
p. 31
“Attrition increased slightly to 13% versus 12.6% sequentially, in-line with Q1 seasonality.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
EPS: INR19.19, up approximately 15% year-on-year (Q1 FY27)
p. 31
“EPS for the quarter stood at INR19.19, up approximately 15% year-on-year.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Cash and cash equivalents: $3.9 bn (Q1 FY27)
p. 31
“Consolidated cash and cash equivalents were at $3.9 bn at the end of the quarter after returning more than $1 bn to the shareholders through dividends.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Free cash flow as % of net profit: 116.5% (Q1 FY27)
p. 31
“Free cash flow was strong at $955 mn at 116.5% of net profit.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Vendor consolidation share of large deal TCV: 20% (Q1 FY27)
p. 31
“We have been on the positive side of vendor consolidation with 20% of the total large deal TCV being from new vendor consolidation deals.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
College graduate hires in Q1: over 4,000 (Q1 FY27)
p. 18
“We have already done almost 4,000 in the first quarter.”
Salil Parekh, page 18 of the filed PDF · View the filing
AI revenue in Q3 (prior year comparison): 5.5% (Q3 FY26)
p. 11
“if you look at when we launched our Hexagon in February of this year, our AI revenue for Q3 was 5.5% of our revenue.”
Jayesh Sanghrajka, page 11 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Revenue growth — 1.5% to 3% Y-on-Y in constant currency · FY27
stated firmly by Salil Parekh
p. 6
“we are changing our revenue growth guidance to 1.5% to 3% Y-on-Y growth in constant currency terms.”
Salil Parekh, page 6 of the filed PDF · View the filing
Operating margin — 20% to 22% · FY27
stated firmly by Salil Parekh
p. 6
“Our operating margin guidance remains the same at 20% to 22% operating margin.”
Salil Parekh, page 6 of the filed PDF · View the filing
Frontier Engineers headcount — 6,000 · next few years
stated as an aspiration by Salil Parekh
p. 5
“Our plan is to have 6,000 Frontier Engineers over the next few years.”
Salil Parekh, page 5 of the filed PDF · View the filing
College graduate recruitment — 20,000 college graduates · FY27
stated firmly by Salil Parekh
p. 18
“This year, we have a plan to recruit 20,000 college graduates.”
Salil Parekh, page 18 of the filed PDF · View the filing
Effective tax rate — 29% to 30% · FY27
stated firmly by Jayesh Sanghrajka
p. 31
“We expect effective tax rate for the year to be in the range of 29% to 30%.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Onsite mix reduction — 75 bps to 1% · FY27
stated firmly by Jayesh Sanghrajka
p. 31
“We expect Onsite mix excluding new acquisitions to reduce by 75 bps to 1% for the year.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Salary hikes — October 2026 and January 2027
stated firmly by Jayesh Sanghrajka
p. 31
“We plan to give salary hikes to most of our employees effective October while the rest of the employees will be covered in January '27.”
Jayesh Sanghrajka, page 31 of the filed PDF · View the filing
Financial Services and EURS growth — higher than company average · rest of FY27
stated firmly by Jayesh Sanghrajka
p. 33
“FS and EURS are expected to grow higher than the company average.”
Jayesh Sanghrajka, page 33 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Salil said he was delighted with what he achieved growing the business, and that the AI strategy is well in place for Dash to continue with some fine-tuning.
Answered by Salil Parekh
Asked by Ritu Singh: Why did you decide to leave now rather than seek an extension, and what is the mandate for the new CEO?
p. 7
“my sense is, I have been fortunate to have a tremendous opportunity and what we have done in Infosys over the last many years and having taken the business from about $10 bn to $20 bn.”
Salil Parekh, page 7 of the filed PDF · View the filing
Salil said conversion timing depends on deal type and AI revenue moves quickly with some quarter-to-quarter variability but a strong secular trend.
Answered by Salil Parekh
Asked by Reshab Shaw: How is TCV conversion trending and is AI revenue lumpy?
p. 9
“On TCV conversion, we see a pretty good way of converting now. What tends to happen is like, when you have a consolidation deal, the conversion comes a little bit quicker.”
Salil Parekh, page 9 of the filed PDF · View the filing
Salil said AI revenue at 8% is already significant and cited a $300 bn addressable market opportunity as new revenue.
Answered by Salil Parekh
Asked by Shilpa Phadnis: When will AI-led revenues be material enough to offset productivity-led compression?
p. 11
“I think, my sense is the AI-led revenues are extremely significant at 8% already.”
Salil Parekh, page 11 of the filed PDF · View the filing
Salil said the company reviewed this with the Board and management and decided not to pursue it at this stage.
Answered by Salil Parekh
Asked by Avik Das: Would Infosys enter the AI infrastructure/data center business like HCL and TCS?
p. 13
“we have decided to not do anything in that space at this stage.”
Salil Parekh, page 13 of the filed PDF · View the filing
Jayesh said currency will be a tailwind, Project Maximus is working well, and the company is confident of the guidance band despite compensation headwinds in H2.
Answered by Jayesh Sanghrajka
Asked by Avik Das: Can margins be held at 20-22% given wage hikes and lower growth?
p. 14
“we will have a headwind coming from the compensation in the second half of the year. But we are very confident at this point in time of the guidance band that we have given.”
Jayesh Sanghrajka, page 14 of the filed PDF · View the filing
Salil acknowledged compression exists across the portfolio in some places but said it has not been externally quantified.
Answered by Salil Parekh
Asked by Haripriya Suresh: Is there AI-driven price deflation in the portfolio, and can it be quantified?
p. 14
“On the compression, I said in the past, we do see that in some places across our portfolio, but we have not externally quantified that compression at this stage.”
Salil Parekh, page 14 of the filed PDF · View the filing
Salil said consolidation deals are within large deals across bigger industries, without specifying sectors, and that the company focuses on economically sensible contracts.
Answered by Salil Parekh
Asked by Beena Parmar: Which sectors are the consolidation deals in, and why were some renewals lost?
p. 16
“we are quite clear that our focus overall is to make sure that we are working with clients on projects and contracts that make economic sense to us.”
Salil Parekh, page 16 of the filed PDF · View the filing
Jayesh said every 1% currency depreciation gives roughly 15-17 bps of margin benefit, partly offset by non-U.S. revenue exposure.
Answered by Jayesh Sanghrajka
Asked by Sanjana B: How much tailwind has rupee depreciation given to margins?
p. 18
“every 1% change in the currency or depreciation in dollar typically gives you anywhere between 15 to 17 bps on margin.”
Jayesh Sanghrajka, page 18 of the filed PDF · View the filing
Jayesh confirmed the like-for-like organic growth implied by the new guidance versus the prior quarter's midpoint.
Answered by Kumar Rakesh
Asked by Kumar Rakesh: How much of the guidance cut reflects organic versus acquisition-driven growth?
p. 34
“So, is that about 2 percentage point of cut at the midpoint in the guidance or am I reading that wrong?”
Kumar Rakesh, page 34 of the filed PDF · View the filing
Jayesh said the two situations were unrelated — one was a deliberate decision not to pursue uneconomic deal terms, the other a client-initiated contract termination unrelated to AI.
Answered by Jayesh Sanghrajka
Asked by Gaurav Rateria: Are the European automotive and EURS client issues linked to a common industry trend or coincidental?
p. 37
“that is the reason that has nothing to do with the client behaviour in terms of AI, etc.”
Jayesh Sanghrajka, page 37 of the filed PDF · View the filing
Salil described AI-first revenue as tied to the six Hexagon growth areas and said deflation is tracked internally but not quantified externally.
Answered by Salil Parekh
Asked by Abhishek Pathak: Can you quantify AI-led deflation and define AI-led revenue?
p. 39
“we acknowledge of course there is a compression and internally, we track it to see how that works.”
Salil Parekh, page 39 of the filed PDF · View the filing
Jayesh confirmed the known impact was fully taken in Q1 with no further follow-through expected specifically from that program.
Answered by Jayesh Sanghrajka
Asked by Ankur Rudra: Was the program termination fully absorbed in Q1, or will it affect Q2 as well?
p. 41
“What we know at this point in time has been considered in Q1.”
Jayesh Sanghrajka, page 41 of the filed PDF · View the filing
Salil said wins came from depth of delivery and technology understanding, and Jayesh added the consolidation deals came at healthy margins.
Answered by Jayesh Sanghrajka
Asked by Keith Bachman: What economics enabled Infosys to win vendor consolidation deals, and how competitive was pricing?
p. 47
“all of these consolidated deals came at a very healthy margins even when you compare to our overall large deals portfolio.”
Jayesh Sanghrajka, page 47 of the filed PDF · View the filing
Risks flagged
One-time revenue impact from a client program termination in the EURS vertical
p. 35
“This is with respect to a client, which has terminated a project in the EURS vertical.”
Jayesh Sanghrajka, page 35 of the filed PDF · View the filing
Softer than expected volumes versus historical trends
p. 30
“Volumes were soft and weaker than expectations and also versus the historical Q1 trends”
Jayesh Sanghrajka, page 30 of the filed PDF · View the filing
Pricing pressure from client productivity expectations and competitive intensity
p. 30
“client expectation on productivity, along with high competitive intensity is resulting in softer increase in price versus our expectations.”
Jayesh Sanghrajka, page 30 of the filed PDF · View the filing
Reduced revenue from a European Manufacturing client due to a deliberate decision not to pursue uneconomic deals
p. 33
“slightly over 1% impact from large a European Manufacturing client due to reduced client spend along with our conscious decision to not pursue certain deals that were not aligned to our return expectations”
Jayesh Sanghrajka, page 33 of the filed PDF · View the filing
Macro environment remaining uncertain and volatile
p. 33
“Overall business environment continues to remain volatile.”
Jayesh Sanghrajka, page 33 of the filed PDF · View the filing
Manufacturing sector impacted by tariffs, geopolitical uncertainty, and energy costs keeping budgets tightly controlled
p. 32
“The impact of tariffs, geopolitical uncertainty and energy cost is keeping budgets tightly controlled.”
Jayesh Sanghrajka, page 32 of the filed PDF · View the filing
Retail and CPG spending remaining muted due to geopolitics, inflation and tariffs
p. 32
“In Retail and CPG, consumer spend remains muted and budgets are tightly controlled due to geopolitics, inflation and tariffs.”
Jayesh Sanghrajka, page 32 of the filed PDF · View the filing
Communications sector clients exercising discipline on discretionary spending
p. 32
“In Communications, operating environment remains challenging as clients continue to exercise discipline on discretionary spending and closely scrutinize investment decisions.”
Jayesh Sanghrajka, page 32 of the filed PDF · View the filing
AI-led productivity demands causing revenue compression across the portfolio
p. 38
“On the back of AI, there is an additional deflation or the AI led deflation as we call it.”
Jayesh Sanghrajka, page 38 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.