India’s Infosys misses profit expectations as costs surge

India’s Infosys Ltd on Sunday reported June-quarter profit that missed estimates, hurt by higher employee expenses, but the IT services company raised its annual revenue outlook, citing a strong demand outlook.

The Bengaluru-based company expects revenue growth of 14 per cent-16 per cent for the financial year to March, slightly up from its view of 13 per cent-15 per cent forecast in April.

Infosys retained its guidance for operating margins for the year at 21 per cent-23 per cent, unchanged from its April forecast.

Operating margins for Infosys for the June quarter came in at 20.1 per cent, down 3.6 per cent year-on-year.

Infosys’ larger IT rival Tata Consultancy Services and also smaller rivals such as HCL Technologies have seen their margins erode as they battle a higher sector-wide talent churn and try to retain employees.

Infosys’s consolidated net profit stood at 53.60 billion rupees ($12.53 million), compared with 51.95 billion rupees a year earlier, it reported.

Analysts had expected a profit of 56.26 billion rupees, Refinitiv data shows.

Revenue from operations jumped 24 per cent to 344.70 billion rupees.