India’s Infosys falls short of profit expectations as costs rise

Infosys reported a June-quarter profit that fell short of expectations, owing to higher employee costs, but the IT services firm raised its annual revenue forecast, citing strong demand.

The Bengaluru-based company anticipates revenue growth of 14 percent -16 percent for the fiscal year ending March, slightly higher than its April forecast of 13 percent -15 percent.

Infosys maintained its year-end operating margin guidance of 21 percent to 23 percent, unchanged from its April forecast.

Infosys’ operating margins for the June quarter were 20.1 percent, down 3.6 percent year on year.

Tata Consultancy Services TCS.NS is Infosys’ larger IT rival, as are smaller rivals such as HCL Technologies HCLT.

NS’s margins have shrunk as it battles higher sector-wide talent churn and attempts to retain employees.

Infosys reported a consolidated net profit of 53.60 billion rupees ($12.53 million), up from 51.95 billion rupees the previous year.

According to Refinitiv data, analysts expected a profit of 56.26 billion rupees.

Revenue from operations increased by 24% to 344.70 billion rupees.