Infy, HCL cut FY24 growth forecast
NEW DELHI : Infosys Ltd and HCL Technologies Ltd on Thursday said their 2023-24 revenue growth will be weaker than their earlier forecasts as their large foreign clients tighten purse strings amid economic uncertainties. With India’s largest tech services company, Tata Consultancy Services Ltd, already witnessing a revenue decline in the second quarter, this portends a depressing year for at least three of India’s Big Five tech companies. Infosys, India’s second-largest technology services provider, on Thursday slashed its growth guidance for a second straight time and now expects it at 1-2.5% in constant currency terms in 2023-24.
Constant currency disregards the impact of exchange rate fluctuations. In April, Infosys signalled 2023-24 revenue growth of 4-7%; in July, this was scaled down to 1-3.5%. In the April-September period, Infosys added $336 million in incremental revenue, translating to a growth of 3.7%.
But management’s expectation of at-best growth of 2.5% in 2023-24 implies a fall in revenue in the third and fourth quarters. “We are seeing discretionary programmes and large transformation programmes getting reduced significantly. And we are seeing the decision-making continuing to be slow," Infosys chief executive Salil Parekh explained on the company slashing its growth outlook.
“We don’t have a view on that," Parekh said when asked if the company expects demand to recover in the second half of the year. Infosys’ American Depositary Receipts (ADRs) were trading 7% lower at $16.38 at 7:50pm. The company reported quarterly revenue of $4.72 billion, a 2.2% sequential rise and a 3.6% increase from a year earlier, better than what analysts had estimated.
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