India’s Infosys raises annual revenue outlook on digital services demand

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FILE PHOTO: The Infosys logo is seen at the SIBOS banking and financial conference in Toronto
FILE PHOTO: The Infosys logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. Picture taken October 19, 2017. REUTERS/Chris Helgren/File Photo

October 13, 2021

BENGALURU (Reuters) -India’s Infosys Ltd on Wednesday raised its annual revenue outlook as demand rose for its software services from global businesses expanding their digital offerings during the COVID-19 pandemic.

The country’s second-largest IT services firm forecast revenue to rise between 16.5% and 17.5% in the financial year to March 2022, compared with its July prediction of 14% to 16% growth. It maintained its annual margin forecast at 22% to 24%.

U.S.-listed shares of the Bengaluru-based company rose as much as 7.4% to $23.50 in pre-market trading.

India’s $194 billion IT services sector has been a big pandemic winner, but signs have emerged of a slowdown in the large contracts that drove most of the industry’s growth in the past year.

Infosys said large deal signings dropped to $2.15 billion in the quarter ended Sept. 30, from $2.6 billion in the June quarter and $3.15 billion a year earlier.

Quarterly earnings at larger rival Tata Consultancy Services last week had also shown signs of moderation in large deals.

Infosys’ consolidated net profit came in at 54.21 billion rupees ($719.48 million), beating the analysts’ average estimate of 52.74 billion rupees, according to Refinitiv data.

Revenue from operations climbed 20.5% to 296.02 billion rupees.

Meanwhile, smaller peer Wipro Ltd reported an 18.9% rise in consolidated net profit to 29.31 billion rupees for the September quarter.

($1 = 75.3460 Indian rupees)

(Reporting by Nallur Sethuraman in Bengaluru;Editing by Vinay Dwivedi and Aditya Soni)

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