FILE PHOTO: Figurines with computers and smartphones are seen in front of Infosys logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Indian software services providers Infosys and Wipro topped quarterly revenue estimates as their mainstay financial industry clients boosted spending.
After over a year of curtailed spending due to economic uncertainty and high borrowing costs, global banks are reviving projects they had on ice, raising hopes for the $254-billion Indian IT sector that gets about a third of its revenue from BFSI clients.
Infosys, India's No.2 IT services company, registered a 2.3% increase in revenue in its banking, financial services and insurance (BFSI) unit in constant currency terms in the second quarter, its best growth in the segment in seven quarters.
Infosys' overall quarterly revenue rose 5.1%, more than the 4.7% increase expected by analysts on average, per LSEG data. However, its profit of 65.06 billion rupees ($774.3 million) missed analysts' average expectation of 68.06 billion rupees as sales and market costs rose.
Meanwhile, No. 4 Wipro's 0.6% revenue growth in the BFSI segment was its first since March 2023. In terms of geography, revenue from the U.S. and Canada, two key markets, also registered growth.
And while Wipro's overall revenue fell 1%, that was less than the 1.1% drop analysts had expected.
The Federal Reserve starting its interest rate cut-cycle last month, after four years, is also expected to boost the IT sector's prospects in the key North American market.
Infosys raised its full-year revenue growth forecast to 3.75%-4.5% from 3%-4%.
Earlier this week, HCLTech, the No.3 IT services company, raised the lower end of its full-year revenue forecast, providing some cheer days after market leader TCS said clients were still cautious with spending. ($1 = 84.0340 Indian rupees)
(Reporting by Varun Hebbalalu, Sai Ishwarbharath B and Haripriya Suresh in Bengaluru; Editing by Savio D'Souza)
