Infosys Declares 26-Rupee Interim Dividend Per Share, Raises AI Revenue Share to 10.5%
Key Facts
Infosys declared an interim dividend of 26 rupees per share, up 13% from 23 rupees a year earlier, as it reported results for the second quarter of fiscal 2027. The company recorded revenue of $5,145 million in the quarter ended September 30, 2026, up 1.5% year on year and 1.2% quarter on quarter in constant currency. Its operating margin stood at 21.0%. By contrast, the company cut its annual revenue growth forecast, Business Standard reported, signaling that growth in AI activity and new deals had not dispelled concerns about slowing demand. The chief financial officer said the board had raised the interim dividend from the previous year.
The total value of large deals won by the company reached $5.2 billion during the quarter, with 62% classified as net new business. The total included a mega deal worth more than $2 billion, according to Infosys’s results statement. These bookings indicate the volume of business the company has secured, while the value of the deals alone does not mean all related revenue will be recorded in the same quarter. Alongside the deals, free cash flow stood at $928 million, equivalent to 113.3% of net profit. The chief financial officer said the company delivered an operating margin of 21.0% "amid elevated volatility," adding that cost and operational efficiencies helped preserve the margin.
AI-related revenue accounted for 10.5% of Infosys’s total revenue in the second quarter, compared with 8.2% in the first quarter, and grew 29% quarter on quarter. The company said the share of this revenue rose as activity expanded, while Chief Executive Salil Parekh pointed to pressure on volumes and the economics of AI contracts. Parekh said: "The quarter was weak for us. Volumes were lower, and we are also seeing pressure in AI. We accept only contracts that meet our economic criteria." The remarks put growth in AI-related revenue alongside the company’s caution over contract terms, as it reported that deflationary pressures linked to the technology could intensify.
Results varied across the sectors the company serves. Revenue from financial services, its largest contributor, rose 2.1%, while revenue from energy, utilities and resources increased 7.3%. By contrast, retail revenue fell 7.7%, and high-tech revenue dropped 17.3%, Business Standard reported. The company said growth prospects in the United States, its largest market, were weakening and that deflationary pressures from AI were likely to increase. It cited these factors in cutting its revenue forecast for fiscal 2026-2027, reflecting the widening impact of market weakness and pricing pressures on its outlook.
Results were mixed against the expectations of analysts surveyed by Bloomberg, Business Standard reported. They had estimated net profit of 7,904 crore rupees and revenue of 49,108 crore rupees; Infosys’s profit came in below estimates, while revenue exceeded expectations. After the results and the forecast cut, the company’s American depositary receipts fell about 6.4% in premarket trading on October 23, 2026, according to the same report. In market data cited by EL7, the stock closed at $12.09 on October 28. The move highlights investors’ cautious response to the growth outlook, despite the dividend increase and the rising share of AI revenue.
On the second half of the fiscal year, the chief financial officer said wage increases and continued intense price competition would affect performance. This adds to the weaker growth expected in the U.S. market and the deflationary pressures linked to AI that the company cited among the reasons for cutting its revenue forecast. For the dividend, Infosys set November 3, 2026, as the record date, with payment scheduled for November 11. The company said in its financial results: "The record date for payment is November 3, 2026, and the interim dividend will be paid on November 11, 2026." The news thus covers both the increase in cash returns to shareholders and their payment dates, as well as growth and cost challenges in coming periods.