Debasis Mohapatra
Bengaluru, 24 April 2026
Infosys’ ADR fell around 4% in NYSE on Thursday after the company’s Q4 earnings disappointed investors. Though headline numbers looked in line with expectations, the biggest red flag came from the weak revenue guidance for FY27.
Here are some of the factors that led to Infosys’ ADR underperformance:
- Though rupee revenue showed an uptick due to rupee depreciation against dollar, the Bengaluru-headquartered company reported a decline of 1.3% in its revenue sequentially on constant currency basis.
- Deal pipeline average declined: Infosys’ deal pipeline for fourth quarter of FY26 stood at $3.2 billion, which was lower than around $4.8 billion reported in the third quarter of last fiscal. Such fall in deal pipeline indicated slowing momentum for the company during the quarter. It could also be a sign of artificial intelligence (AI) was leading to smaller deal sizes, impacting the large deal pipeline.
- Weak FY27 Guidance: The company guided for a 1.5%-3.5% revenue growth rate in FY27 as compared to 2-4% projected by various brokerage firms. Though the management has indicated that the growth projections have taken into account an uncertain business environment prevailing globally, investors are worried about the possible AI impact on company’s business going ahead.
- Sharp drop in headcount: The company reported a dip in 8,440 employees to take its headcount to 328,594 by the end of March quarter. Its attrition also increased to 12.6 per cent during the March quarter. The company in previous quarters have added staffers. As net addition in headcount is seen as a healthy project pipeline, such sharp drop has created fears among investors about the project execution delays in coming quarters. It also has to be seen whether the company cut employee count owing to rising AI-led automation.
Overall, Infosys Q4 numbers were inline with market projection. However, weak revenue growth outlook, cut in employee count and AI-led disruption have created fears among investors about its growth prospects in FY27 when the global economy is facing risks from surging crude oil prices amid West Asia conflict.
