Infosys raises annual revenue forecast on financial services boost
FILE PHOTO: Figurines with computers and smartphones are seen in front of Infosys logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File photo
BENGALURU :India's No.2 IT services provider Infosys raised the floor of its annual revenue forecast on Wednesday after reporting stronger-than-expected quarterly sales, as its financial services segment got a fillip from AI deals and market-share gains.
The Bengaluru-based company narrowed its revenue growth forecast to 1 per cent to 3 per cent from a prior range of flat to 3 per cent, in line with analysts' expectations.
Global interest rate cuts by central banks could boost India’s $283-billion IT industry, where the banking and financial services segment contributes about a third of total revenue.
"We have seen a lot of the discussions on the economy worldwide coming to a more stable situation but it is not fully settled," said Salil Parekh, CEO of Infosys.
The company is seeing "strong traction" in financial services segment, Parekh said in a post-earnings conference, adding that logistics and manufacturing orders were being hit by the macroeconomic environment.
Infosys' consolidated sales rose 7.5 per cent year-on-year to 422.79 billion rupees ($4.9 billion) in the June quarter, while analysts, on average, had expected revenue of 418.06 billion rupees, as per data compiled by LSEG.
"Infosys has done better on revenue front compared to its larger rival Tata Consultancy Services. The outperformance is due to solid deals won in the previous quarters," said Ambrish Shah, an analyst at Systematix.
Revenue from the firm's financial services segment rose for the fifth consecutive quarter, helped by marquee deal wins including Bank of Sydney, Metro Bank, and AIB.
The IT firm's net profit rose 8.7 per cent in the three-month period to 69.21 billion rupees, mainly due to lower depreciation and communication expenses.
Analysts had expected 67.55 billion rupees of profit, as per data compiled by LSEG.
Net new bookings rose $3.8 billion during the quarter, compared with $2.6 billion in the previous quarter and $4.1 billion in the year-ago period.
Earlier this month, IT industry bellwether TCS missed revenue estimates and flagged delays in decision making and project starts.
Smaller rivals and Tech Mahindra have fared better than large rivals.
Infosys' U.S.-listed shares were up 1.6 per cent in pre-market trade.
($1 = 86.3880 Indian rupees)
