Infy adds to IT gloom by cutting revenue forecast; shares fall

BENGALURU: India’s second-largest software services exporter, Infosys, on Friday pulled down is revenue growth guidance for the current financial year to 8% to 9%,

BENGALURU: India’s second-largest software services exporter, Infosys, on Friday pulled down is revenue growth guidance for the current financial year to 8% to 9%, making it the second revision since it opened the year with a 11.5% to 13.5% forecast.

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Just a few weeks back, Infosys had shrunk the revenue growth projection for the year to 10.5% to 12%. It was widely expected within the investing community that Infosys might further push down its growth projection to 9% to 9.5% in its results announcements, but the company made it even lower. In response, its stock fell 5% in morning trade. However, it later recovered to end 2.3%lower on the BSE.

For the second quarter ended September 2016, Infosys reported a 6.1% rise in net profit to Rs 3,606 crore, compared to Rs 3,398 crore a year-ago. Revenues during the quarter grew 10.7% to Rs 17,310 crore, against the same period last year.

“Considering our performance in the first half of the year and the near-term uncertain business outlook, we are revising our revenue guidance,” CEO Vishal Sikka said. “Longerterm, I believe it’s clear that our industry’s future lies in evolving from a cost-based, people-only model, to one in which people are amplified by software and AI (artificial intelligence), and are freed to innovate in areas that are strategic to our clients’ future. And in this all-important transformation, I am glad to see us make continued progress.”

On Thursday, India’s largest software exporter Tata Consultancy Services reported a 8.8% increase in net profit to Rs 6,586 crore during the July-September quarter. TCS CEO and MD N Chandrasekaran had said “it has been an ‘unusual Q2’ for TCS.”