India’s Infosys ups annual sales forecast on demand recovery
7:34 am Thursday, July 18th, 2024
By Sai Ishwarbharath B
BENGALURU (Reuters) -Infosys topped quarterly results estimates on Thursday on a recovery in demand from clients in its mainstay financial services business, prompting India’s second-largest IT services firm to raise its revenue forecast for the financial year.
U.S.-listed shares of the Bengaluru-based company rose 5%.
Infosys joined industry leader Tata Consultancy Services and smaller rival HCLTech in reporting a strong quarter, raising hopes for the $254 billion sector which has been struggling with sluggish demand post a pandemic-induced boom.
“There is a recovery at play after five to six quarters of depressed spending,” Investec analyst Nitin Padmanabhan told Reuters.
Infosys sees revenue growth of 3%-4% in the fiscal year 2025, up from its prior view of 1%-3%.
Consolidated revenue in the first quarter rose 3.6% to 393.15 billion rupees ($4.70 billion), beating the analysts’ average estimate of 389.15 billion rupees, as per LSEG data.
Its banking and financial services posted a revenue rise of 0.3% after falling for four straight quarters.
IT clients had cut their spending on non-essential projects in recent quarters amid economic uncertainty and higher interest rates. Analysts expect that to change after the US Federal Reserve cuts interest rates and that nation’s election outcome is out.
Net profit at Infosys rose 7.1% to 63.68 billion rupees in the quarter ended June, beating the analysts’ average estimate of 62.53 billion rupees, as per LSEG data.
Operating margin rose 30 basis points year-on-year to 21.1%.
Large order bookings – or contract wins above $100 million – came in at $4.1 billion for the quarter, against $4.5 billion in the fourth quarter and $2.3 billion a year ago.
(Reporting by Sai Ishwarbharath B; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)
