Infosys ADRs Slide After Company Trims Revenue Forecast

American Depositary Receipts (ADRs) of Infosys (NYSE: INFY) fell 4.6% in pre-market trading on Tuesday after the technology services giant narrowed its full-year revenue growth forecast. The sell-off pushed the stock to $10.43, just above its 52-week low, as investors reacted to the weaker outlook and a concurrent leadership change.

Guidance Cut and Leadership Change

In its first-quarter fiscal 2027 earnings report, Infosys announced it was trimming the upper end of its full-year revenue growth guidance. The company now expects constant currency revenue growth between 1% and 3.0%, down from a prior ceiling of 3.5% established in April. The company did, however, reaffirm its operating margin guidance band of 20%–22%.

Compounding the cautious outlook, the board also announced the appointment of Ashiss Kumar Dash as CEO Designate, effective immediately. The leadership transition comes at a challenging time for the company as it navigates a difficult macroeconomic environment.

Market Reaction and Context

The modest guidance reduction disappointed investors who had hoped for a more robust forecast, particularly with the stock already trading near its 52-week low of $10.34. The news follows recent downward revisions from Wall Street analysts.

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• TD Cowen cut its price target to $10 from $13 on July 9.
• Susquehanna lowered its target to $12 from $14 on July 10.

Both firms maintained Hold ratings on the stock, signaling caution even before the company's latest announcement. The negative sentiment was exacerbated by a broader market downturn, with the S&P 500 and Nasdaq also trading lower, providing no support for the stock.

Sector-Wide Pressures

The headwinds facing Infosys are reflective of broader challenges across the Indian IT services sector. The industry is contending with structural concerns around the potential for AI to disrupt traditional outsourcing models. Furthermore, constrained discretionary spending by corporate clients continues to pressure growth for major technology exporters.