Infosys slips out of India’s top 10 most valuable firms after sharp market cap loss

Infosys has slipped out of India’s top 10 most valuable companies after losing more than ₹2 lakh crore in market capitalisation this year, signalling a shift in investor sentiment towards the IT sector. The decline follows a sustained fall in the company’s stock, which is down around 30% so far this year.

With its market value now at roughly ₹4.9 lakh crore, Infosys has fallen behind Life Insurance Corporation of India, which has moved into the top 10 with a valuation of about ₹5.1 lakh crore, according to data cited by India Today.

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Valuation decline driven by weak outlook

The fall in Infosys’ market value has been closely linked to its latest earnings outlook. While the company reported steady performance in the March quarter, with revenue rising 13% and profit also increasing, its forward guidance disappointed investors.

Infosys projected revenue growth of 1.5% to 3.5% for FY27, lower than market expectations. This triggered a sharp sell-off in the stock following the earnings announcement, India Today reported.

Key financial indicators include:

• More than ₹2 lakh crore erosion in market capitalisation this year
• Stock decline of around 30% year to date
• Current valuation at approximately ₹4.9 lakh crore
• Reported $14.9 billion in deal wins for FY26
  
  

Despite strong deal wins, delays in execution are affecting revenue visibility, adding to investor concerns.

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Demand slowdown reshapes IT sector outlook

The decline is not limited to a single company. It reflects a broader slowdown in demand for IT services, driven by changing client priorities.

Brokerages cited by India Today note that global clients are:

• Reducing discretionary spending
• Delaying large transformation projects
• Prioritising cost efficiency over expansion
  
  

This shift is directly impacting IT services firms, whose revenues depend on large-scale digital transformation programmes. While deal pipelines remain active, longer execution cycles are pushing out revenue recognition.

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AI creates both opportunity and pressure

Artificial intelligence is emerging as a key factor shaping the sector’s outlook. Infosys has invested in AI platforms such as Topaz and expanded AI deployment across its workforce. However, analysts suggest that the impact of AI is complex.

While AI is opening opportunities in areas such as data, cloud and automation, it is also reducing demand for traditional services.

Another factor weighing on IT stocks is the shift in global capital flows. Investment is increasingly moving towards markets and companies linked to AI infrastructure, particularly in the United States, South Korea and Taiwan.

As a result, traditional IT services firms are seeing reduced investor interest. Infosys currently trades at about 18 times forward earnings, reflecting a moderation in valuations.

Infosys’ exit from the top 10 most valuable companies highlights a broader transition in India’s equity markets. The IT sector, once viewed as a consistent growth engine, is entering a phase of slower expansion and structural change.

At the same time, emerging sectors aligned with global technology shifts and domestic policy support are gaining investor attention. The pace at which IT firms adapt to new demand patterns and AI-driven business models will be critical in determining their future positioning.