Infosys beats Street in Q3 on US boost, raises guidance

Firm beats peer TCS in revenue growth on improving discretionary spending by clients

- Jas Bardia

The growth engines that fueled Infosys Ltd's performance in the first half of the financial year (April-September) retained momentum in the December quarter helped by strong business in its core North American market.

India's second-largest information technology (IT) services company also raised its full-year revenue outlook for the third time this financial year, crediting improving discretionary spending by financial services companies in the US and Europe.

Infosys' revenue improved 0.92% from the second quarter to $4.94 billion in the December quarter, beating analysts' estimates and signaling brighter prospects for India's IT services sector.

A Bloomberg poll of 22 analysts had expected Infosys to report a revenue of $4.81 billion for the third quarter.

While Infosys fared better than its larger peer Tata Consultancy Service Ltd, India's third-largest IT services company HCL Technologies Ltd reported stronger growth for the December quarter.

TCS reported a 1.7% sequential decline in revenue to $7.54 billion whereas HCLTech reported a 2.6% jump to $3.5 billion.

To be sure, the October-December period is a seasonally weak quarter for IT services companies on account of the holiday season and fewer working days.