Wipro and Infosys logos.
Credit: Reuters File Photo
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 per cent 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 per cent, more than the 4.7 per cent increase expected by analysts on average, per LSEG data. However, its profit of Rs 6,506 crore ($774.3 million) missed analysts' average expectation of Rs 6,806 crore as sales and market costs rose.
Meanwhile, No. 4 Wipro's 0.6 per cent revenue growth in the BFSI segment was its first since March 2023. In terms of geography, revenue from the US and Canada, two key markets, also registered growth.
And while Wipro's overall revenue fell 1 per cent, that was less than the 1.1 per cent 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 per cent-4.5 per cent from 3 per cent-4 per cent.
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.