Indian IT giant Infosys cut its annual revenue growth forecast on Friday despite beating quarterly revenue estimates on the back of strong demand for its artificial intelligence services.
Infosys is India's second-largest software services exporter and earns more than 80% of its revenue from Western markets.
The Bengaluru-headquartered firm, along with its competitors, has struggled with a demand slowdown in recent years fanned by global uncertainty made worse by the Middle East war and fierce competition from generative AI solutions.
The company reported revenue growth of 10.7% year-on-year to Rs492.44bn ($5.19bn) in the July-September quarter, marginally higher than the Rs491.32bn analysts projected.
Net profit rose 6.2% to Rs78.23bn.
"As enterprises move to AI adoption at scale, the strong growth in AI revenues is a recognition of our differentiated market positioning and client confidence," said Salil Parekh, chief executive officer and managing director.
But the company lowered its revenue growth forecast for the fiscal year ending March 2027 to 1-2% from its previous estimate of 1.5-3%.
India's $315bn IT industry has over the last year grappled with muted client spending on big technology projects as artificial intelligence tools from companies like Anthropic and OpenAI offer new ways of doing labour-intensive work that was previously outsourced.
Many Indian software outsourcers, including Infosys, have increased investments in AI tools, hoping to both earn new business and cut costs by boosting operational efficiencies.
