Infosys' weak Q1 raises the risk of another year of lagging peers

Infosys Q1FY27 results missed expectations with sequential constant-currency revenue growth of just 1% against the Street estimate of 2%, prompting a cut to FY27 CC revenue growth guidance. The drag stemmed from a 50 basis point hit from an EURS client programme termination, softer volumes and lower pricing, while AI-led productivity deflation remains a concern with AI services at 8.2% of revenue. The stock fell over 2% as analysts flagged a potential fourth consecutive year of revenue moderation, with the firm trading at a FY28 PE of 12.85 versus TCS at 13.87 and HCL Technologies at 16.33.