Infosys on Wednesday reported a stronger-than-expected 11.5% jump in quarterly profit as the software services provider secured large deals and reined in costs during the COVID-19 pandemic.
The April-June period was expected to be disruptive for India‘s nearly $200 billion information technology industry as the coronavirus outbreak crimped client spending, but results so far have been mixed.
Infosys was “reasonably optimistic” about the financial services sector, but expects continued weakness in the capital markets, cards and payments industry, Chief Operating Officer UB Pravin Rao told reporters on a conference call.
Still, the company’s forecast indicated that revenue growth this year could fall well below historical levels.
The Bengaluru-based firm expects revenue to be flat or grow 2% on a constant currency basis and operating margins of 21%-23% for 2020-21. This compares with a revenue growth of 9% or more in the last two years on a constant currency basis.
The company had not provided any projections in the March quarter, citing COVID-19-related uncertainty.
Infosys signed $1.74 billion worth of large deals in the three months to June 30. That was higher than the $1.65 billion in the preceding quarter, but lower than a year earlier.
The company on Tuesday announced a large IT contract with the Vanguard Group to handle the U.S. asset manager’s corporate retirement plans business.
Larger rival Tata Consultancy Services missed June-quarter profit estimates, while Wipro reported stronger-than-expected earnings.
Infosys’ net profit climbed to 42.33 billion rupees ($563.8 million) from 37.98 billion rupees a year earlier. Analysts on average had expected a profit of 39.87 billion rupees, according to Refinitiv data.
Chief Financial Officer Nilanjan Roy said the company kept a tight lid on costs related to travel, marketing, hiring and discretionary expenses.
Revenue rose 8.5% to 236.65 billion rupees.