India's Infosys lowers annual revenue growth forecast

BENGALURU, Oct 23 Reuters) - Infosys trimmed its annual revenue growth forecast on Friday despite marginally beating estimates for quarterly revenue after demand from its energy and utility clients picked up.

Revenue at India's second-largest IT services provider rose 10.7 per cent to 492.44 billion rupees ($5.19 billion) in the July-September period. 

Analysts on average had estimated revenue of 491.32 billion rupees, according to data compiled by LSEG. 

The company revised its revenue growth forecast for the fiscal year ending March 2027 to 1 per cent-2 per cent from its earlier estimate of up 1.5 per cent-3 per cent. 

Most analysts had expected the company to downgrade the upper-end of the range to 1.5 per cent to 2.5 per cent.

The rise of AI has hurt India's $315 billion IT industry, forcing companies to overhaul their business models and offer steep discounts.

Despite AI unlocking newer revenue streams, it is challenging the traditional revenue as clients are increasingly tying fees ​to technology-led productivity gains instead of hours worked.  

Peers Tata Consultancy Services and HCLTech both met their revenue estimates earlier this week, but their investors cheered AI revenue uptick with their stocks surging.

Revenue from Infosys' energy business, its third-largest revenue contributor, rose 7.3 per cent from a year earlier after stripping out currency fluctuations. The overall revenue rose 1.5 per cent, excluding the currency impact.

The Bengaluru-based tech major's net profit rose 6.2 per cent to 78.23 billion rupees in the three-month period, falling below 79.29 billion rupees expected by analysts, as per LSEG-compiled data. 

Deal wins stood at $5.2 billion during the quarter, compared with $3.1 billion in the year-ago quarter. 

The company's Mumbai-listed shares closed flat ahead of the results, with a basket of IT stocks dropping 0.3 per cent.