Infosys shares experienced a significant drop, hitting a 52-week low, after the company announced its Q4FY26 results and provided a modest revenue growth guidance of 1.5-3.5 per cent in constant currency for FY27, falling below market expectations and raising concerns about AI-led deflation and margin pressures.
OpenAI and Anthropic are not simply enabling new software capabilities, they are moving directly into enterprise execution, workflow ownership, and decision orchestration.
The COVID-19 pandemic has pushed demand and clients understand that every work does not have to be done onsite, which is expected to open a lot more offshoring opportunities from large global markets going forward, according to a top Infosys' executive. The Bengaluru-based company, which logged a 23 per cent jump in its December 2021 quarter revenue, also said its portfolio of services and capabilities, especially on cloud and digital, are resonating well with clients and it sees a good pipeline for that. "In the long run, if you see, COVID-19, while it had a huge impact on demand, the entire ability for the supply side to deliver in a remote environment really will shine up, and that has opened up the eyes of many of our clients that every work does not have to be done onsite.
India's $280-billion IT industry heads into 2026, balancing visa-related headwinds and global trade uncertainty against its biggest-ever push into artificial intelligence and the rapid expansion of global capability centres (GCCs). Heightened scrutiny of the US H-1B visa programme - including a proposed $100,000 fee for new visas and concerns over a potential 25 per cent outsourcing tax - has complicated cross-border delivery for Indian firms, even as companies accelerate efforts to reduce reliance on onsite staffing.
With discretionary spending still under pressure, the information technology (IT) services industry continued to face an uncertain demand environment in the third quarter of 2025-26 (Q3FY26).
In the medium term, corporates and vendors could move away from visa dependency, shift more work offshore and share higher cost burdens with clients.
Infosys, the country's second largest software company, on Wednesday expressed concern over the Ohio state government's move to ban IT outsourcing to offshore locations such as India.
The magnitude of the new H-1B visa application fee for fresh petitions - math of which works out to USD 500 million in case of 5,000 filings - may nudge IT companies to expand offshore delivery or increase local hiring, according to Motilal Oswal Financial Services.
'It's better to stay away from large IT stocks until there is clarity on tariffs.'
Indian information-technology (IT) service providers are likely to report another quarter (July-September) of low, single-digit growth owing to macro uncertainties, chiefly emanating from America, with no respite in sight even in the second half of the year.
With demand for information-technology (IT) services in North America still sluggish, Europe has become a source of optimism for Indian companies because it is delivering steady gains over the past two years and continuing to outperform in the latest quarter. Yet analysts caution a full-scale revival will require a rebound in the United States (US), particularly in manufacturing, retail, and BFSI (banking, financial services, and insurance), because Europe contributes only about a third of the revenues.
'New announcements are made every day which brings tremendous amount of instability and uncertainty.' 'Relying on America has become a big problem.'
Against the backdrop of a clampdown on visas by the US and growing antagonism towards foreign workers and immigrants in that country, Infosys Technologies, India's second-largest IT services firm, is mulling an 'extreme offshoring' model to help reduce its dependence on H1 and L1 visas.
Infosys usually gives a wage rise to employees every April.
Export-led Indian IT sector is not directly hit by Trump's tariff order on goods, but there could be worrisome indirect bearings on it arising out of possible slowdown in decision-making and GDP growth in America over higher tariffs, which may then cloud demand from specific verticals, according to some analysts.
Infosys, as part of performance improvement programme, allows 'poor performers' to undergo training to get into shape.
Infosys added 10,997 employees (gross) in the last quarter of FY'14 and 39,985 during the fiscal to take its total headcount to 1,60,405 people.
Slowing growth and execution challenges for Cognizant (CTSH) may well allow Infosys to overtake the former after a decade. Cognizant had marched ahead of Infosys in terms of revenue in the first quarter of financial year 2012-13. The Nasdaq-listed IT services firm's performance in Q3 and the guidance for Q4 and full-year 2022 suggest that it could take time for Cognizant to see the expected improvement in performance from its decision to restructure.
Experts said this would not only reduce Infosys' dependence on the H1B visa, which has seen increased restrictions under the current US administration. It will also help the company in building an employee pyramid for its future operations.
Infosys is now testing with five or six global clients
'The race is now on for Indian IT firms to develop their AI prowess and focus on a software-first approach to services as the people element becomes more complicated with Trump's expected new regulations.'
Faced with budget constraints and margin pressures, Indian IT services providers such as Tata Consultancy Services, Infosys, Wipro and HCL are moving more work offshore (to India) rather than onsite (at the client's site) in a bid to contain costs.
Hobbled by the European crisis, countries like France and Germany who once fiercely resisted offshoring IT jobs are increasingly doing so, sending coveted contracts India's way.
Out of 24,230 IIT and NIT grads, about 8,000 students didn't find any takers during campus placement drives this year.
Cognizant becomes the second largest offshore-centric IT services player.
The Bengaluru-based company, striving to return to sustained growth, is looking at different ways to reduce the cost structure, aiming to win large clients, said Rajiv Bansal, chief financial officer.
Infosys was the only company among the large software services firms, which had not hiked salaries so far.
Infosys Technologies Ltd announced on Friday it has been positioned by Gartner, Inc., in the leaders quadrant in the 'Magic Quadrant for North American offshore applications services 2007' report.
The IT firm will soon initiate discussions with colleges to start the process from September.
Hiring of more local people has been necessitated since majority of its American clients are not comfortable sending works offshore.
Last year, salary increases were given only in October, when the company came under pressure from increments offered by peers.
The six service lines that Infosys is focusing on include manufacturing, retail, consumer packaged goods, logistics, lifescience, energy, communications, financial services and insurance.
Sikka's regret over lack of strategic talk with clients hints at larger problem
The offshore development centre of information technology major Cadence Design Systems has dislodged Infosys Technologies from its top position to emerge as the best employer of the Indian IT industry in 2003.
The company's total income stood at Rs 5,821 crore, showing an over six per cent rise, at the end of the September quarter of the current fiscal.
India's top technology companies will witness a tepid revenue expansion in the third quarter (October - December) of the current financial year (Q3FY24) - along expected lines - on the back of furloughs and no blockbuster deals, even as the momentum gained from Generative AI (GenAI) is likely to take centre stage. IT services and consulting firm Accenture's first quarter numbers in FY24 showed a significant pick up in GenAI spending. It signed new bookings to the tune of $450 million in this space, a surge from the $300 million signed in the whole of FY23.
Infosys is yet to announce its 2014-15 results.
Infosys, the country's second largest IT services firm, is open to 'bigger scale' mergers and acquisitions but with a caveat, it is not interested in "yesterdays" companies.
Last year, Infosys had deferred salary increases, citing an uncertain business environment.
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