BENGALURU:
Infosys
‘s shares surged nearly 9% in early trade on the NYSE on Thursday after it revised its revenue forecast upwards to 3-4% for FY25, up from the 1-3% it had projected in the March
quarter
. However, it has retained its operating
margin
guidance for
FY25
at 20-22%.
In the June quarter, Infosys achieved a 3.6% sequential
revenue growth
in constant currency and a 2.5% growth year-on-year.
The
financial services
sector emerged as the top contributor to the company’s topline, providing better visibility for the remainder of the year. While financial services grew 7.9% sequentially, manufacturing sector grew 3.6% over the same period. In comparison, its larger peer TCS reported a 2.2% sequential and 4.4% year-on-year growth in constant currency.
“We started the financial year with a strong
performance
in Q1 (June quarter) across multiple dimensions – including broad-based revenue growth, expansion in operating margin, strong large deal wins, and strong cash generation. I’m particularly pleased with growth in financial services, where we are seeing improvement in client spending in
North America
. All geographies and most industry groups grew sequentially. Volume growth turned positive after several quarters. We won 34 large
deals
with a total contract value of $4.1 billion, with 57.6% of the deals being net new,” Infosys CEO Salil Parekh said at the June quarter earnings conference in Bengaluru on Thursday. In April, Infosys signed an agreement to acquire in-tech, an R&D services provider focused on the German automotive industry for 450 million euros, which contributed to its revenue.
Parekh said that with Infosys’s robust performance in the June quarter and a strong deal pipeline, it’s seeing early signs of improvement in its financial services business in the US. “While discretionary spends continue to be under pressure, our highly differentiated offerings around driving efficiencies at scale, and the transformation capabilities around GenAI have positioned us well in this market.”
Despite the unchanged macroeconomic environment, Parekh said that Infosys has visibility until the next quarter, which aligns with the commentary from its peers. The company’s operating margin for the June quarter expanded by 100 basis points sequentially to 21.1%, aided by Project Maximus, a comprehensive margin improvement plan implemented across five pillars and over 20 tracks, involving about 600 managers.
