Employees of Indian Software giant Infosys Technologies Limited walk in the campus of the company's headquarters in Bangalore on July 14, 2017. / AFP PHOTO / MANJUNATH KIRAN (Photo credit should read MANJUNATH KIRAN/AFP via Getty Images)

Indian software giant Infosys reported a 20.6 percent rise in quarterly net profits Wednesday, boosted by increased demand for digital services from its Western clients during the pandemic.

The Bangalore-headquartered firm posted a net profit of 48.45 billion rupees ($661.34 million) for the quarter ended September 30, up from 40.19 billion rupees a year earlier.

India’s IT outsourcing industry has proved a rare bright spot for the beleaguered economy, with Infosys and rival Tata Consultancy Services (TCS) both offering employees salary hikes even as the country struggles with a prolonged slowdown and high unemployment.

“The strength and resilience of Infosys was fully visible in Q2 with operating metrics witnessing a healthy increase”, chief operating officer Pravin Rao said in a statement.

“Employees have been a critical part of our success,” he added, announcing that staff would all receive raises and a performance-based bonus.

Quarterly revenue rose to 245.70 billion rupees from 226.29 billion rupees last year.

Infosys is India’s second-largest IT company.

It was at the forefront of an outsourcing boom that saw the country become a back office to the world, as Western firms subcontracted work to a skilled English-speaking workforce.

Over 60 percent of Infosys revenue comes from North American markets.

Its larger competitor TCS reported a slump in its net profits last week as it set aside 12.18 billion rupees for damages in US litigation and announced a $2.18 billion share buyback plan.

Infosys shares were down over two percent in Mumbai ahead of results.