By Sai Ishwarbharath B, Hritam Mukherjee and Haripriya Suresh
BENGALURU (Reuters) -India’s No.2 software-services exporter Infosys raised its annual revenue forecast for the third time this financial year on Thursday as its U.S. banking and retail clients warmed up to spending more on discretionary projects.
The sentiment echoed that of market leader Tata Consultancy Services and smaller rival HCLTech, which also highlighted early signs of discretionary spending picking up and an improvement in the demand environment.
“We are seeing an improvement in the retail and consumer product industry in the U.S. with discretionary challenges easing,” CEO Salil Parekh said in a press conference.
The company expects its annual revenue to rise by 4.5%-5%, up from its prior outlook of 3.75%-4.5%.
The U.S. inflation outlook and the Federal Reserve’s planned rate cuts also suggest that the U.S. market will “remain strong”, Parekh added.
Infosys, which also topped analyst estimates for revenue and profit in the third quarter, reported a rise in North American revenue after five quarters. That market accounts for 60% of its total revenue.
Revenue in the October-December period rose 7.6% to 417.64 billion rupees ($4.83 billion), beating the analysts’ average estimate of 412.78 billion rupees, data compiled by LSEG showed.
“The encouraging numbers aside, Infosys’s results show significant positives, including the continued focus on large deals and strategic cost-takeout engagements,” said Gaurav Parab, an analyst at tech research firm NelsonHall.
Parab also found Infosys’s comments on Agentic AI, a technology that powers AI agents or bots, “encouraging”.
Improved demand from U.S. clients helped all eight business segments at Infosys post higher growth, with its mainstay financial services arm notching 6.1% revenue growth.
That helped Infosys’s third-quarter profit rise 11.4% to 68.06 billion rupees, topping the analysts’ average estimate of 67.29 billion rupees.
Large order bookings, or deals over $50 million, stood at $2.5 billion during the quarter, versus $2.4 billion in the previous quarter and $3.2 billion in the year-ago period.
($1 = 86.5510 Indian rupees)
(Reporting by Sai Ishwarbharath B, Hritam Mukherjee and Haripriya Suresh; Editing by Savio D’Souza, Dhanya Skariachan and Janane Venkatraman)
