Infosys Lowers FY27 Guidance Amid Rising Crude Prices; RBI Bulletin Highlights Inflation Concerns

Indian markets closed lower on Friday, with benchmark indices Nifty and Sensex declining, as IT major Infosys trimmed its revenue growth guidance for FY27 to 1-2% after reporting Q2 results, signaling demand uncertainty in the tech sector. This development, coupled with persistently high crude oil prices, which saw Brent futures climb to $114.40 a barrel, intensified inflation worries and pressured the Indian Rupee, which weakened to 94.9450 against the US Dollar. The Reserve Bank of India's October bulletin further underscored these concerns, noting a rise in CPI inflation in September amidst global geopolitical tensions.

Key highlights

• Infosys Q2 FY27 Results: Net profit rose 6% year-on-year to ₹7,823 crore, but the company lowered its full-year revenue growth guidance to 1-2% in constant currency from an earlier 1.5-3%.
• Crude Oil Prices: Brent crude futures for December 2026 delivery climbed to $114.40 a barrel on Friday, driven by geopolitical tensions and supply concerns.
• Indian Rupee: The currency weakened to 94.9450 against the US Dollar on Friday, impacted by elevated crude prices and foreign fund outflows.
• RBI October Bulletin: The Reserve Bank of India's latest bulletin highlighted that CPI inflation edged up in September due to broad-based increases in food, fuel, and core components.
• FSDC Meeting: Finance Minister Nirmala Sitharaman chaired the 30th Financial Stability and Development Council meeting, focusing on financial stability and regulatory coordination.

Infosys Trims FY27 Revenue Guidance Amidst Soft Demand

IT services giant Infosys reported a 6% year-on-year increase in its consolidated net profit to ₹7,823 crore for the second quarter of fiscal year 2027, up from ₹7,364 crore in the year-ago period. Revenue from operations also grew 11% year-on-year to ₹49,244 crore. The company declared an interim dividend of ₹26 per equity share, with November 3, 2026, fixed as the record date.

Despite the profit growth, the market's attention is likely to be drawn to the company's revised revenue guidance. Infosys has trimmed its revenue growth forecast for FY27 to 1-2% in constant currency, a reduction from its earlier projection of 1.5-3%. This downward revision reflects ongoing demand uncertainty, subdued volumes, and rising pricing pressure from clients, alongside higher expectations for productivity and weakness in discretionary spending across retail and high-tech sectors.

The company's CEO and MD, Salil Parekh, noted that Infosys secured large deals worth $5.2 billion during the quarter, with 62% being net new engagements, reinforcing its market position as global clients undertake complex transformation programs. Jayesh Sanghrajka, CFO, acknowledged that Q2 was "softer" with continued volume softness and pricing pressure. The company also saw a rise in AI-related revenue, accounting for 10.5% of total revenue, up from 8.2% in the corresponding period. The lowered guidance from a bellwether IT firm could set a cautious tone for the broader Indian IT sector in the upcoming trading sessions.

Crude Oil Surge Fuels Inflation Fears, Pressures Rupee

Global crude oil prices continued their upward trajectory, with Brent crude futures for December 2026 delivery climbing $1.23, or 1.09%, to settle at $114.40 a barrel on Friday. This surge is primarily attributed to escalating geopolitical tensions in the Middle East and concerns over potential disruptions to energy supplies. The Indian crude basket has also remained elevated, averaging $122.01 per barrel in October so far.

For India, a net importer of crude oil, persistently high prices pose significant macroeconomic challenges. A sustained rise in oil prices is expected to increase the country's import bill, exert pressure on the Indian Rupee, and complicate the inflation outlook. The Rupee, in fact, weakened to 94.9450 against the US Dollar on Friday, reflecting these concerns and foreign fund outflows. Higher energy costs can also translate into increased transportation, logistics, and manufacturing expenses for domestic industries, potentially squeezing corporate margins unless these costs can be passed on to consumers. Sectors such as oil marketing companies, aviation, paints, and chemicals are particularly vulnerable to these price fluctuations. The ongoing geopolitical instability suggests that crude oil prices will remain a critical factor influencing India's economic stability and market sentiment in the near term.

More stocks and market news

RBI October Bulletin Highlights Inflationary Pressures

The Reserve Bank of India (RBI) released its monthly bulletin for October 2026, providing a comprehensive overview of the Indian economy. A key takeaway from the bulletin is the rise in the Consumer Price Index (CPI) inflation in September, driven by broad-based increases across food, fuel, and core components. The RBI noted that renewed geopolitical tensions in West Asia and supply chain disruptions are amplifying inflationary pressures globally, prompting major central banks to raise policy rates. Despite these global headwinds, India's high-frequency indicators continue to show resilience in industry and services. The bulletin also reviewed the NBFC sector's performance through 2025, indicating double-digit credit growth and improved asset quality, with a sustained decline in non-performing asset ratios.

FSDC Meeting Focuses on Financial Stability

Union Finance Minister Nirmala Sitharaman chaired the 30th meeting of the Financial Stability and Development Council (FSDC) in New Delhi on Friday. The meeting, attended by the RBI Governor, heads of financial sector regulators (including SEBI, IRDAI, IFSCA, PFRDA, and IBBI), and senior government officials, focused on issues related to financial stability, financial sector development, and coordination among regulators. The FSDC is the apex forum for discussing macroprudential supervision of the economy and the functioning of large financial conglomerates, making its deliberations crucial for maintaining the robustness of India's financial system.

Sterlite Technologies Reports Record Q2 FY27 Performance

Sterlite Technologies Limited announced its Q2 FY27 and H1 FY27 earnings, showcasing what the company described as its strongest quarterly performance to date. The optical connectivity infrastructure provider reported record revenue of ₹2,529 crore, marking a 145% year-on-year growth, driven by surging demand for AI-enabled data center infrastructure and multi-year contracts with global hyperscalers. The company's operational EBITDA margin expanded to 27.1%, and profit after tax reached a record ₹517 crore. Sterlite also secured significant new orders, including a $1.2 billion multi-year hyperscaler order for AI-ready optical solutions, boosting its open order book to a record ₹35,274 crore and providing substantial revenue visibility.

Market context

On Friday, October 23, 2026, the Indian benchmark indices closed in negative territory. The Nifty 50 fell 0.39% to 22,600, while the Sensex shed 0.17% to 73,123.83. Broader markets witnessed sharper declines, with the BSE 150 MidCap Index dropping 2.10% and the BSE 250 SmallCap Index losing 2.68%. Market breadth was decidedly negative on the NSE, with 3,011 stocks declining against 623 advances. The Indian Rupee weakened to 94.9450 against the US Dollar, influenced by elevated crude oil prices and foreign institutional investor (FII) outflows. Brent crude futures were trading around $114.40 a barrel.

Why these stories matter

The lowered guidance from Infosys, a bellwether of the Indian IT sector, signals potential headwinds for the industry, impacting investor sentiment and future earnings expectations. This could lead to a re-evaluation of IT stock valuations. The continuous rise in crude oil prices is a critical macro concern, directly affecting India's trade balance, inflation trajectory, and the strength of the Rupee, which in turn influences corporate input costs and consumer purchasing power. The RBI's bulletin provides essential insights into the nation's economic health, particularly regarding inflation and the stability of the NBFC sector, guiding policy decisions and market expectations. The FSDC meeting underscores the government's proactive stance on financial stability, crucial in a volatile global environment. Sterlite Technologies' strong results highlight the growth potential in specific technology-driven segments like AI infrastructure, offering a positive counter-narrative amidst broader market caution.

What to watch next

• IT Sector Performance: Monitor the market reaction to Infosys's guidance and subsequent commentary from other IT majors.
• Crude Oil Movement: Keep a close watch on global crude oil prices and geopolitical developments in the Middle East.
• Inflation Data: Await further inflation data releases and the RBI's stance in upcoming monetary policy reviews.
• FII Flows: Track foreign institutional investor activity for signs of sustained outflows or renewed interest in Indian equities.
• Corporate Earnings: Upcoming Q2 FY27 earnings from other companies will provide further insights into sectoral and overall economic performance.

Sources

• Economic Times: Infosys Q2 Results Live Updates
• The Hindu: Infosys Q2 net jumps 6% to ₹7,823 crore, to pay interim dividend of ₹26/share
• The Indian Awaaz: Indian shares fall for fourth straight session as oil, geopolitical risks weigh on sentiment
• RBI: Reserve Bank of India Bulletin - October 2026
• Investing.com: Sterlite Q2 FY27 slides: AI boom drives record revenue, margins

FAQ

1. Why did Infosys lower its revenue guidance for FY27?

Infosys lowered its FY27 revenue growth guidance to 1-2% in constant currency due to demand uncertainty, softer volumes, pricing pressures, and reduced discretionary spending by clients in sectors like retail and high-tech.

2. How do rising crude oil prices affect the Indian economy?

Rising crude oil prices negatively impact the Indian economy by increasing the import bill, putting pressure on the Rupee, and exacerbating inflation. This can lead to higher input costs for industries and potentially reduce consumer purchasing power.

3. What were the key findings of the RBI's October 2026 bulletin?

The RBI's October 2026 bulletin highlighted that CPI inflation rose in September due to broad-based increases in food, fuel, and core components. It also noted the resilience of the Indian economy despite global headwinds and reviewed the NBFC sector's double-digit credit growth and improved asset quality.

4. What is the Financial Stability and Development Council (FSDC) meeting about?

The FSDC meeting, chaired by the Finance Minister, is an apex forum that discusses issues related to financial stability, financial sector development, and coordination among various financial regulators in India. It plays a crucial role in macroprudential supervision of the economy.

5. What drove Sterlite Technologies' strong Q2 FY27 performance?

Sterlite Technologies' record Q2 FY27 performance was primarily driven by surging demand for AI-enabled data center infrastructure and significant multi-year contracts with global hyperscalers, leading to substantial revenue growth and a record order book.

Disclaimer: This article is for educational purposes only. It does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.