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Infosys Ltd. raised its annual sales forecast for the third time this fiscal year, boosting hopes of a revival in corporations’ spending on information technology.

Revenue will rise 4.5% to 5% in the fiscal year through March 2025, Bangalore-based Infosys said Thursday. That compared with the average analyst estimate of 5.6%. Infosys had previously projected 3.75% to 4.5%.

Overseas clients slowed spending on software services in 2024 as elevated interest rates and armed conflicts in Eastern Europe and the Middle East created uncertainties. This year, easing inflation in the US boosts chances of rate cuts that would leave clients with bigger budgets for IT projects, but any H-1B visa curbs and protectionist barriers by Donald Trump’s administration could weigh on outsourcers’ business.

For the three months through December, Infosys’s net income rose 11% to 68.1 billion rupees ($787 million). Analysts expected 67.7 billion rupees on average, in a traditionally weak quarter for outsourcers due to furloughs. Sales rose 7.6% to 417.6 billion rupees.

Bigger Indian rival Tata Consultancy Services Ltd. last week said 2025 is looking better for business than the past year as customers seem more confident about IT spends than in previous quarters and deal cycles are shortening.

What Bloomberg Intelligence Says

“It (Infosys) could gain greater visibility in customers’ discretionary tech budgets the next quarter, which may support a recovery over the next 12 months.”

- Anurag Rana, analyst 

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Infosys and TCS have traditionally helped clients in North America and Europe cut costs by offering cheap back-office solutions. India’s $250 billion IT industry is now betting on automation, cloud computing and generative artificial intelligence to win bigger business transformation deals from multinationals such as Apple Inc. and Boeing Co. 

Shares of Infosys ended 1% lower in Mumbai ahead of the earnings, and have gained 2.6% this year.

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