Infosys reports lower than expected revenue in Jan-Mar quarter
Infosys reported lower-than-expected fourthquarter revenue on Thursday, in a seasonally weak period for the IT services provider, as cautious clients curtailed spending amid macroeconomic uncertainties.
Revenue rose 1.3% to ₹37,923 crore ($4.54 billion) in the January-March quarter, compared to analysts’ expectation of ₹38,624 crore as per LSEG data.
For fiscal year 2025, Infosys forecast revenue growth between 1% and 3% in constant currency.
India’s $254 billion IT sector has been struggling in recent quarters as clients cut spending on non-essential projects amid inflationary pressures.
This has led companies to accept tougher contract terms to win large deals, while grappling with clients renegotiating, delaying or cancelling contracts, resulting in a sharp slowdown in the industry’s growth from the pandemic-fuelled boom a few years back.
Infosys’ consolidated profit rose 30% to ₹7,969 crore for the quarter.
The company reported a decline in growth in the financial services and retail verticals, but chief executive officer Salil Parekh said he expects fiscal year 2025 to be better for financial services.
Infosys’ largest market, North America, reported a revenue decline of 2.1%.
The company’s operating margin for the quarter contracted 90 basis points (bps) year-on-year (y-o-y) to 20.1%. For fiscal year 2025, the company forecast its margins in the range of 20%-22%.
“There’s been a good traction with the cost, efficiency, consolidation nature of large deals. Whereas we see that digital programs or discretionary work is still not as visible within the work we’re seeing,” Parekh said.
The macro environment had a “mixed outlook”, he added.
Large deal signings for the fourth quarter stood at $4.5 billion versus $2.1 billion a year earlier.
Tata Consultancy Services (TCS), said last week that weak spending continued to be an overhang, as it reported lowerthan-expected fourth-quarter revenue.