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India's Infosys lifts annual revenue forecast on digital services boom

India's Infosys raises annual revenue outlook on digital services demand
India's Infosys raises annual revenue outlook on digital services demand   -   Copyright  Thomson Reuters 2021
By Reuters

By Sethuraman N R and Sankalp Phartiyal

BENGALURU -India’s Infosys Ltd on Wednesday raised its annual revenue outlook, betting on higher demand for software services from global businesses expanding their digital offerings during the COVID-19 pandemic.

The country’s No.2 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.

“The (deal) pipeline looks really strong and robust,” Chief Executive Salil Parekh told a news conference. “That (the outlook) gives us a way to demonstrate that we are confident that the growth is looking good in the coming quarters.”

U.S.-listed shares of Infosys were up 4% in premarket trading as it also beat market estimates for quarterly consolidated net profit with a nearly 12% jump to 54.21 billion rupees ($719.48 million). Its revenue from operations leaped 20.5%.

India’s $194 billion IT services sector has won large contracts over the past year as companies invest in services such as cloud computing, digital payments and cybersecurity.

But signs have started to emerge of a slowdown from the peak recorded last 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.

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

Grappling with a talent war in the sector, Infosys said it planned to hire 45,000 college graduates this year after the voluntary attrition rate for its IT services segment surged to 20.1% in the quarter from 12.8% a year earlier.

Meanwhile, smaller rival Wipro Ltd reported an 18.9% rise in quarterly consolidated net profit.

($1 = 75.3460 Indian rupees)