India’s Infosys raises annual revenue forecast for digital services

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File photo: The Infosys logo is seen at the SIBOS Banking and Financial Conference on October 19, 2017 in Toronto, Ontario, Canada. Photo taken on October 19, 2017. Reuters / chrishalgren / file photo

13 October 2021

By Sethuraman NR and Sankalp Fartiyali

BENGALURU (Reuters) – Infosys Ltd of India raised its annual revenue outlook on Wednesday, betting on rising demand for software services from global companies expanding their digital products during the COVID-19 pandemic.

The country’s second-largest IT services company has forecast revenue growth of 16.5 per cent to 17.5% for the fiscal year ending March 2022, but a growth of 14% to 16% in July.

“The (transaction) pipeline looks really strong and robust,” CEO Salil Parekh said at a news conference. “It (the outlook) gives us a way to show that we believe growth is going well in the coming quarters.”

US-listed shares of Infosys rose 4% in pre-market transactions. This was above market forecast for quarterly consolidated net income, rising nearly 12% to 54,210 million ($719.48 million). Operating revenue increased 20.5%.

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

However, bearish signs are starting to show from the peak recorded last year. According to Infosys, signing of large transactions fell to $2.6 billion in the June quarter, from $3.15 billion in the year-ago quarter to $2.15 billion in the quarter ended September 30.

Last week’s revenues from rival Tata Consultancy Services also largely showed signs of moderation in transactions.

Infosys said it plans to hire 45,000 college graduates this year after tackling the talent war in the sector, with the IT services segment’s voluntary turnover growing to 20.1 per cent from 12.8 per cent last year.

Meanwhile, smaller rival Wipro Ltd reported 18.9% growth in quarterly consolidated net income.

($ 1 = 75.3460 Indian Rupee)

(Reporting by Nallur Sethuraman in Bangalore, Edited by Aditya Soni)

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