In This Article:
(Bloomberg) -- Sign up for the India Edition newsletter by Menaka Doshi – an insider's guide to the emerging economic powerhouse, and the billionaires and businesses behind its rise, delivered weekly.
Most Read from Bloomberg
-
What Initial Polling Data Show About the Trump-Harris Matchup
-
Trump Files Complaint Over Harris Getting Biden’s $96 Million War Chest
-
Trump Floated Jamie Dimon for Treasury Secretary, Then Denies It
Infosys Ltd. raised its annual sales forecast for the first time since early 2023, reflecting growing hopes that emergent trends such as AI may help reverse a years-long slump in corporate tech spending.
Revenue will increase 3% to 4% on a constant currency basis in the fiscal year through March 2025, Infosys said Thursday. That compared with the average analyst estimate of 3.16%. Bangalore-based Infosys had previously projected 1% to 3% growth.
The forecast may raise hopes among peers from Accenture Ltd. to International Business Machines Corp. that an industry malaise may soon be over. Infosys’s larger Indian rival Tata Consultancy Services Ltd. last week expressed optimism about a better fiscal year, though it remained cautious about a sustained growth momentum.
“Infosys’ results suggest that the demand environment may be stabilizing, and could represent an inflection point,” Anurag Rana, an analyst at Bloomberg Intelligence, said in a report. “Positive growth in financial services after four quarters stood out most and will likely be the main acceleration engine for the company’s turnaround.”
Shares of Infosys jumped as much as 4.9% in Mumbai trading for their biggest intraday gain since January. The stock has climbed 17% this year, but remains below its 2022 highs.
While 4% annual sales growth would still be historically low for Infosys, it’s an improvement from the second half of last fiscal year when revenue barely budged. For the first fiscal quarter through June, sales rose 3.7% to 393.2 billion rupees ($4.7 billion), while net income climbed about 7% to 63.7 billion rupees. Analysts expected 62.48 billion rupees on average.
When IBM reports earnings next week, investors are looking for more signs that technologies such as artificial intelligence and a resilient global economy are encouraging companies to pick up tech investment. With inflation gradually slowing, traders are betting the US Federal Reserve will begin cutting rates in September. The global economy is set to expand 3% in 2024, more than the 2.7% projected earlier this year, according to Bloomberg Economics.