Infosys' revenue up 5% riding on large digital transformation deals, in-tech acquisition

India's second-largest IT services company, Infosys, announced on Thursday that its revenue from operations in Q2FY25 (July-September) increased by 5% year-on-year (YoY) to ₹40,986 crore due to a ramp-up in large digital transformation deals and growing traction in cloud and generative artificial intelligence (AI) initiatives.
 
Salil Parekh, CEO and MD of Infosys said that the company experienced strong growth of 3.1% quarter-on-quarter in constant currency in Q2. The growth was broad-based with good momentum in financial services. “This growth is a result of our strength in industry expertise, market-leading capabilities in cloud with Cobalt, and generative AI with Topaz, leading to an increasing client preference to partner with us,” he said.
 
The company's net profit also increased by 2.2% quarter-on-quarter to ₹6,506 crore. The company said in a regulatory filing that the growth was primarily driven by the ramp-up of large deals, increasing traction in generative AI initiatives, and cost optimisations. The acquisition of R&D services provider In-Tech also contributed to the growth.
 
The total contract value (TCV) of large deals was $2.4 billion. The company signed several large deals this quarter, including one with UK-based Metro Bank to enhance some of its IT and support functions, digitally transforming the bank's business operations, and another with Belgium's Proximus to help unlock new business opportunities.
 
Infosys also announced collaborations with global companies including TDC Net, Posti, Sally Beauty Holdings, Inc., Polestar, and India’s Life Insurance Corporation of India (LIC) to drive digital transformation initiatives and enhance customer experience.
 
The company raised its revenue guidance for the financial year 2024-25 (FY25) to 3.75-4.5%, up from the 3-4% guided in Q1 FY25. The revenue guidance upward signals better spending from clients.
 
The July to September quarter also saw other Indian IT majors benefiting from large digital transformation deals. On October 10, India's largest IT services firm, Tata Consultancy Services (TCS), reported strong digital transformation deals driven by increased investments in segments like AI, cybersecurity, and cloud solutions. In Q2, TCS reported several large deals dominated by the retail sector, including wins from Primark, McDonald's, and Croma. Most of these deals were digital and business transformation-related, providing hope for transformation deals to return and customers to open up tech spending.
 
On Wednesday, India's third-largest IT firm, HCL Technologies, reported an 8.2% increase in revenue to ₹28,862 crore in Q2 FY25 compared to the same period last year. HCL Tech's CEO & Managing Director, C Vijayakumar, stated that the company's pipeline is robust, with a focus on data & AI, digital engineering, SAP migration, and efficiency-led programs. In Q2, the Noida-based company secured several digital transformation deals, including an expanded partnership with Xerox in August, emphasising AI-driven engineering services and digital process operations.
 
Meanwhile, India's fourth-largest software company, Wipro, also posted higher-than-expected second-quarter revenue on Thursday. The company's revenue from operations increased by 1.5% to ₹22,301.6 crore in Q2FY25 as against ₹21,963.8 crore reported in the preceding quarter of the same year.
 
Wipro also had several large deal wins for cloud and digital transformation projects in the July-September quarter, partnering with JFK International Air Terminal to create a cloud-based data strategy using Microsoft's Azure Data Platform and extending its partnership with UK's retailer, John Lewis Partnership, for a cloud transformation project, among others.