Infosys Ltd. raised its annual sales forecast and defied fears…
Infosys Ltd. raised its annual sales forecast, defying fears that a global economic slowdown would prompt customers at the outsourcing giant to cut back on tech spending.
The Bengaluru-headquartered company said it expected sales to grow between 15% and 16% in the year to March 2023, pushing the bottom of its sales outlook as it repeated the top.
The number 2 exporter of software services in the country and rivals such as Tata Consultancy Services Ltd. are so far seen as a key driver in India’s $227 billion IT sector and have so far remained optimistic about winning new business deals. But concerns about a global recession and a European energy crisis continue to weigh on the sector, which remains vulnerable to cuts in discretionary IT spending.
WHAT BLOOMBERG INTELLIGENCE SAYS
Despite strong growth in most sectors, we do not expect upgrades to the full-year outlook due to increasing recession risk, but we do expect management to be more pessimistic in its comments on future spending.
– Anurag Rana, Analyst
Click here for research
Infosys net income rose 11% to 60.2 billion rupees ($731 million) in the second quarter ended September, a filing said. That surpassed an average analyst estimate of rupees 59.02 billion in a Bloomberg survey. Quarterly sales increased 23% to 365.4 billion rupees. The company also announced the buyback of 50.3 million shares for a whopping 93 billion rupees at 1,850 rupees per share.
Larger competitor TCS reported an 8% increase in its quarterly earnings earlier this week, but warned it should be more wary of uncertainties in light of mounting volatility. IT companies like Infosys, which have won customers in North America and Europe by providing low-cost solutions to problems like the Y2K bug, are now turning to services like cloud computing, machine learning, artificial intelligence and analytics to drive revenue. to increase .
However, global technology spending faces headwinds as companies move workers back into the workplace, dampening demand from the pandemic era. Increasing competition from global IT giants such as Accenture Plc and International Business Machines Corp. also weigh on the margins of the Indian software services companies.