Axis Securities Upgrades Stock to BUY Following Q2 Results

Q2FY27 Revenue: Rs 35,620 Cr (+11.5% YoY)
Q2FY27 Net Profit: Rs 5,132 Cr (+21.2% YoY)

Reader Takeaway: Strong AI-led demand and revised growth guidance support the upgrade, while global macroeconomic volatility remains a key risk.

What just happened

Axis Securities has upgraded the stock to 'BUY' with a target price of Rs 1,370. This follows the company’s Q2FY27 results where net profit grew by 21.2% YoY to Rs 5,132 Cr. The company’s revenue for the quarter stood at Rs 35,620 Cr, marking an 11.5% YoY increase. Net new bookings hit $3.3 billion, the second-highest in the firm's history.

Why this matters

Management has raised its FY27 revenue growth guidance to 2.5–4.0%, up from the previous 1.0–4.0% range. This signal of confidence is largely pinned on the rapid expansion of Advanced AI services, which saw 78% YoY revenue growth. With EBIT margins expanding 92 basis points YoY to 18.1%, the firm is successfully balancing growth with operational efficiency.

Risks to watch

Despite the positive outlook, the brokerage highlights potential headwinds. Persistent global macroeconomic volatility could threaten demand. Additionally, the software segment faced an 11.2% decline in revenue due to lower subscription renewals, and rising subcontracting costs remain a threat to margin stability.

What to track next

Investors should closely monitor the conversion of the $3.3 Bn deal pipeline into realized revenue. Additionally, keep an eye on the progress of new infrastructure projects, including the AI data center in Bhubaneswar and the semiconductor lab in Bengaluru, as these will be central to the company’s long-term digital strategy.