Infosys has flagged intensifying pricing pressure in the IT services market as clients demand greater productivity gains from artificial intelligence (AI), adding to challenges for the company even as its AI business continues to grow rapidly.
The Bengaluru-headquartered IT services company said rising competitive intensity and higher client expectations around productivity were weighing on its growth outlook, prompting it to lower its FY27 revenue growth guidance to 1-2% in constant currency terms from 1.5-3% earlier.
“We have also seen pricing pressure on the back of competitive intensity and higher ask on productivity,” Infosys Chief Financial Officer Jayesh Sanghrajka said during the company’s Q2 FY27 earnings press conference on October 23.
He cautioned that pricing pressure would continue into the second half of the financial year, alongside the impact of employee compensation increases.
“We will see continued intensity of pricing. So we will see that as a headwind,” Sanghrajka said.