Infosys Q2 FY27: PAT +6.2% YoY trails revenue growth as tax bites; guidance cut to 1-2%

Infosys's consolidated PAT (attributable to owners) rose 6.2% YoY to ₹7,823 Cr on revenue of ₹49,244 Cr, up 10.7% YoY and 2.1% QoQ. The reported revenue growth is flattered by currency: in constant currency, growth was just 1.5% YoY and 1.2% QoQ — the metric the company itself leads with — so the headline topline strength overstates underlying demand. Standalone PAT came in at ₹7,893 Cr on revenue of ₹40,719 Cr; the two bases tell a broadly consistent story this quarter. The profit-revenue gap traces to below the operating line. Company-reported operating margin held stable at 21.0% (unchanged QoQ and YoY), and management credited 'cost and operational efficiency measures' for that stability even as other income fell to ₹848 Cr from ₹982 Cr a year ago and ₹984 Cr last quarter (down ~14% both ways). The bigger drag was tax: the effective rate rose to 29.1% from 27.9% a year earlier (tax expense ₹3,225 Cr on PBT of ₹11,063 Cr, which itself grew a faster 8.2% YoY), pulling PAT growth below both PBT and revenue growth — the kind of trailing-profit signal that warrants scrutiny rather than celebration. Management's own framing leaned on deal momentum and AI rather than margin expansion: CEO Salil Parekh highlighted $5.2 Bn of large-deal TCV (62% net new, including one deal over $2 Bn) and AI revenue growing 29% QoQ to 10.5% of total revenue. That framing lines up with the print — margins were defended, not expanded, and the growth story rests on deal pipeline and AI mix rather than broad-based demand. Against management's own prior guidance, the quarter is a miss: FY27 constant-currency revenue guidance was narrowed down to 1%-2% from the 1.5%-3% range set out just one quarter ago (itself already trimmed from 1.5%-3.5%), with operating margin guidance held at 20%-22%. That is a second consecutive guidance cut, consistent with the cautious tone management struck on the prior concall. No verifiable Street consensus for this specific quarter's revenue/PAT could be confirmed via web search, so vsStreet is left unknown rather than guessed. Concurrent developments — a ₹26/share interim dividend (up 13% from ₹23), the Truist GCC expansion, the Columbia University AI research partnership, the ABN Amro collaboration extension, and the clarification that the US PERM program suspension is 'not material' — round out a quarter where the company defended margins and dividend growth while trimming its own revenue outlook.