BENGALURU: Infosys raised its revenue forecast and Tata Consultancy Services TCS predicted robust demand on Wednesday as the Indian IT giants said they expect tech spending to continue, especially for digital services such as the cloud.
Infosys said that large deal wins worth US $2.53 billion in the three months to December had boosted its confidence, as it was seen as a bellwether for India's more than US $190 billion software services industry.
Mumbai-based TCS and Bengaluru-based Infosys came to prominence by providing Western clients low-cost solutions for problems such as the Y 2 K bug and have become global giants in international business as outsourcing grew.
Infosys expects to have revenue growth of 19.5 per cent -- 20 per cent for the financial year to end-March 2022, compared to a previous 16.5 per cent -- 17.5 per cent prediction, while retaining its operating margin guidance.
The pricing environment remains stable and the amount clients want to spend is going up, said Chief Executive Salil Parekh, chief executive of 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 ranging from cloud-computing to digital payment infrastructure to cybersecurity.
In the third quarter, Infosys, India's No 2 IT company, reported a nearly 12 per cent rise in its consolidated net profit to 58.09 billion rupees US $786 million, beating analysts' average net profit of 57.05 billion rupees, according to Refinitiv Eikon.
The TCS consolidated net profit rose 12.3 per cent to 97.69 billion rupees, slightly less than the average analyst forecast of 98.44 billion rupees, according to Refinitiv data.
TCS CEO Rajesh Gopinathan said it was a very broad-based growth and very broad-based demand environment and that we are participating strongly across the full spectrum of demand. We have confidence in terms of outlook for the future, and that gives us a lot of confidence. TCS said that the growth was across all services, including cloud, cyber security, consulting and services integration, internet of things, and digital engineering.
Revenue from operations at TCS jumped 16.4 per cent 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 footing because of the large deal wins and the Infosys CEO's statement on the large digital transformation pipeline.
Another Indian IT major, Wipro, reported earlier in the day, said its December quarter revenue increased 30 per cent, while net profit was nearly flat.