Infosys raises revenue forecast, TCS sees strong demand

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Infosys raises revenue forecast, TCS sees strong demand

BENGALURU, Jan 12 Reuters - Infosys raised its revenue forecast and Tata Consultancy Services TCS predicted strong demand on Wednesday as the Indian IT giants said they expect tech spending to continue, particularly for digital services such as the cloud.

Infosys INFY.NS, which is often seen as a bellwether for India's more than $190 billion software services industry, said large deal wins worth $2.53 billion in the three months to the end of December had boosted its confidence.

Mumbai-based TCS and Bengaluru-based Infosys came to prominence by providing Western clients low-cost solutions to problems such as the Y 2 K bug and have become global giants in international business as outsourcing grew.

Infosys anticipates 19.5% -- 20% revenue growth for the financial year to end-March 2022, compared to a previous 16.5% -- 17.5% prediction, while retaining its operating margin guidance.

The pricing environment remains stable and the amount of clients want to spend on technology goes up, Chief Executive Salil Parekh told a virtual news briefing.

India's software services sector has won more business during the COVID 19 epidemic, as companies look to boost their digital presence and demand IT services from cloud-computing to digital payment infrastructure to cybersecurity.

The consolidated net profit of 2 IT company was 58.09 billion rupees $786 million in the third quarter, beating analysts' average estimate of 57.05 billion rupees, according to Refinitiv Eikon.

The consolidated net profit rose 12.3% to 97.69 billion rupees, slightly less than the average analyst forecast of 98.44 billion rupees, Refinitiv data showed. It's a very broad-based growth that we are experiencing and very broad-based demand environment, and we are participating strongly across the full spectrum of demand, TCS CEO Rajesh Gopinathan told reporters. We have a lot of confidence in terms of outlook for the future. The growth was across all services, including cloud, cyber security, consulting and services integration, Internet of Things and digital engineering, according to TCS.

Revenue from operations at TCS jumped 16.4% to 488.85 billion rupees, while Infosys posted revenue of 318.67 billion rupees.

Saurabh Jain, assistant vice president at SMC Securities, said that the Indian IT companies are on a strong foot due to the large deal wins and the Infosys CEO's statement on the large digital transformation pipeline.

Another Indian IT major Wipro, which reported earnings earlier in the day, said its December quarter revenue climbed 30%, while net profit was nearly flat.