Infosys Lowers Revenue Growth Expectations Amid Rising Demand
BENGALURU, Oct 23 – Infosys has adjusted its annual revenue growth outlook, announcing a reduction despite slightly exceeding revenue expectations for the latest quarter. The adjustment comes as demand from clients in the energy and utilities sectors has shown improvement.
For the July-September quarter, Infosys reported a 10.7% increase in revenue, reaching 492.44 billion rupees (approximately $5.19 billion). This figure slightly outpaced analysts’ average expectation of 491.32 billion rupees, according to LSEG data.
The company has revised its revenue growth forecast for the fiscal year ending in March 2027, lowering it from an expected growth of 1.5%-3% to a new range of 1%-2%. This adjustment aligns with what most analysts anticipated, who had predicted a decrease in the upper end of the range to between 1.5% and 2.5%.
The rise of artificial intelligence (AI) has been a significant factor impacting India’s IT sector, valued at $315 billion. Companies are now facing a shift in their business models, leading them to provide larger discounts. Even though AI is creating new revenue opportunities, it is also changing traditional income sources as clients begin to link fees to productivity improvements driven by technology rather than the number of hours worked.
In contrast, other industry players like Tata Consultancy Services and HCLTech reported meeting their revenue forecasts and saw their stocks rise due to positive developments in AI-related revenue.
Infosys’ energy segment, its third-largest revenue source, recorded a 7.3% growth year-over-year after accounting for currency fluctuations. Overall revenue, excluding currency effects, grew by 1.5%.
The tech giant’s net profit increased by 6.2%, reaching 78.23 billion rupees for the quarter, though this was below analysts’ expectations of 79.29 billion rupees, based on LSEG data. The company secured deals worth $5.2 billion during the quarter, a significant rise from $3.1 billion in the same period last year.
Shares of Infosys, listed in Mumbai, remained relatively unchanged before the announcement, while overall IT sector stocks experienced a slight decline of 0.3%.
($1 = 94.94 Indian rupees)
(Reporting by Sai Ishwarbharath B in Bengaluru; Editing by Jochelle Mendonca and Mrigank Dhaniwala)
