Infosys Q3 FY21 results: Infosys Limited, the country’s second-largest software services company by market value, raised its forecast for annual revenue growth on Wednesday after reporting a 16.6% increase in profit for the October-December quarter. Revenue forecasts have been increased following an increase in customer demand for digital services such as cloud computing amid the Covid-19 pandemic. The consolidated net profit of the Bengaluru-based company rose to ₹ 5,197 crore from ₹ 4,457 crore a year earlier, beating estimates. Operating income jumped 12.3% to ₹ 25,927 crore. Executives said they have witnessed widespread growth in many areas of cloud services and data analytics. (Also read: Infosys Third Quarter Results: Net Profit Increases 16.6%, Beating Estimates, Revenue Up 12.3%)
Infosys said it expects annual revenue for the fiscal year to the end of March 2021 to increase 4.5% to 5% in constant currencies, more than 2% to 3% forecast earlier. The higher demand was also due to the larger gains in the third quarter. The company has won several contracts, including a cloud partnership with German automaker Daimler AG as well as a strategic partnership with British aircraft engine manufacturer Rolls-Royce.
“There is a huge movement to accelerate digital spending, to do more things in the cloud and … we are now ready to participate and play heavily on this force,” said Salil Parekh, CEO of Infosys during an online press conference. The banking, financial services and insurance (BFSI) sector accounted for just over 33% of the total sales of Infosys, its largest source of revenue.
“We feel much more optimistic about banking and financial services following a number of big gains,” said Pravin Rao, COO. The company will hire around 24,000 employees on college campuses nationwide next year. Analysts on average expected a profit of ₹ 5,050 crore for the company, according to Refinitiv data cited in a Reuters report.
The company’s local competitors, Tata Consultancy Services (TCS) and Wipro, also posted higher profit in the third quarter, beating estimates. TCS’s net profit rose to Rs 8,701 crore in the third quarter from ₹ 8,118 crore a year earlier. Wipro reported consolidated net profit of 20.4% at ₹ 2,968 crore, while dollar revenue growth was the highest in 36 quarters.
As of 4:00 p.m., Infosys shares were up 1.16% to ₹ 1,387.70 each on BSE.