India's Infosys lifts revenue forecast as digital transformation fuels IT demand

© Reuters. FILE PHOTO: A man walks past a billboard of Infosys Technologies Ltd's office in Bangalore, capital of the southern state of Karnataka, October 10, 2003. REUTERS/Jagadeesh NV KK/FA

By Sethuraman N R and Sankalp Phartiyal

BENGALURU (Reuters) -India's Infosys (NYSE:INFY) Ltd on Wednesday raised its annual revenue forecast, fuelled by strong deal momentum from global companies strengthening their digital presence to better manage pandemic-led disruptions.

Large deal wins in the December quarter were at $2.53 billion, a near 18% rise from the second, the company said.

"We had a strong set of large deals and the pricing environment remains stable ... The amount clients want to spend on technology is going up," Chief Executive Officer Salil Parekh said in a virtual news conference.

The country's second-largest IT services firm by revenue said it expects revenue growth of 19.5%-20% for the financial year to March, compared with the 16.5%-17.5% growth predicted earlier, but retained the operating margin guidance.

"The large deal wins and the CEO's statement on large digital transformation pipeline gives good amount of confidence that the Indian (IT) companies are on a strong footing," said Saurabh Jain, assistant vice president at SMC Securities.

India's $194-billion IT services industry has been a big beneficiary from the pandemic spurring companies to bolster investments in services ranging from cloud-computing, digital payment infrastructure to cybersecurity.

Crosstown rival Wipro (NYSE:WIT) earlier in the day reported a 30% rise in revenue for the December quarter and a near flat net profit.

Meanwhile, the country's largest IT services firm, Tata Consultancy Services, posted a 12.3% rise in quarterly profit and approved a share buyback worth 180 billion rupees..

Infosys said consolidated net profit climbed to 58.09 billion Indian rupees ($786.06 million) in the third quarter, beating analysts' average estimate of 57.05 billion rupees, according to Refinitiv Eikon.

Revenue rose to 318.67 billion rupees, with the banking, financial services and insurance unit, which accounts for over a third of the total, posting a 16.85% growth.

($1 = 73.9000 Indian rupees)