Infosys posts better Q1 growth but discretionary spending is yet to pick up

ET Intelligence Group: Among the top three software exporters who have declared first quarter numbers so far, Infosys delivered better performance beating the average analyst estimates on parameters including revenue, profit, and operating margin. The country’s second largest IT company reported stronger sequential top line momentum compared with Tata Consultancy Services (TCS) and HCL Technologies, helped by a low base in terms of a revenue drop in the previous quarter and a one-off revenue benefit from a client.

However, like peers, Infosys echoed a continued slack in discretionary spending by clients. During an analyst conference call, it mentioned that though there are early signs of pick up in the banking, financial services, and insurance (BFSI) vertical, the largest revenue generator for the company, a strong recovery is not yet visible. BFSI contributed around 28% to the company’s revenue in the June quarter.