Bengaluru, India - Infosys, India's second-largest IT services exporter, has narrowed its annual revenue growth forecast for the current fiscal year. The revised forecast comes after the company reported stronger-than-expected revenue for the first quarter, driven by growth in its banking and financial services segment.
The Bengaluru-based company adjusted its annual revenue growth forecast to a range of 2% to 3%, up from the previous estimate of 1% to 3%. This adjustment aligns with analyst expectations for a slight lift on the lower end of the forecast.
Consolidated sales for the quarter rose 8.5% year-on-year, reaching 444.9 billion rupees ($5.06 billion). This figure surpassed analysts' expectations, which averaged 439.29 billion rupees. Net profit also saw a significant increase, rising 13.19% to 73.64 billion rupees, exceeding estimates of 72.01 billion rupees.
Infosys' performance was bolstered by its banking and financial services segment, which has demonstrated consistent growth. The company's CEO, Salil Parekh, attributed part of the success to Infosys' enterprise AI capabilities. Large deal bookings, defined by Infosys as deals exceeding $50 million, reached $3.1 billion during the quarter.
Despite the positive results for Infosys, the broader Indian IT sector faces a somewhat uncertain outlook. Larger rival Tata Consultancy Services (TCS) had previously reported disappointing quarterly numbers, reflecting delays in decision-making and project starts. Global economic uncertainty and the impact of trade tensions continue to be factors influencing the industry.
Infosys earns over 80% of its revenue from Western markets, making it susceptible to global economic trends. While U.S. President Donald Trump's tariff policies don't directly target Indian IT firms, broader trade tensions can make companies worldwide more hesitant to invest in large tech projects.
The company retained its operating margin forecast at 20-22% for FY26. The growth was seen in five of its verticals, with North America, its largest market, experiencing a 2% increase. The manufacturing sector also contributed significantly, growing 12.2% in constant currency and accounting for 16.1% of total revenues. The financial services sector grew 5.6% and contributed 27.9% of the total revenue.
Infosys' Mumbai-listed shares closed 0.2% lower ahead of the results and are down 21.8% this year.
