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BENGALURU: Infosys forecast one of its weakest revenue guidance ranges, between 0% and 3% for 2025-26, mainly due to macroeconomic uncertainties and tariff-related concerns.According to the company, in response to tepid market cues, customers have become more cautious with their discretionary spending, prompting discussions about cost efficiency and vendor consolidation deals. However, it retained its margin guidance of 20-22% for the current financial year.
This forecast stands as one of the lowest revenue guidance in more than a decade, excluding the pandemic when the company suspended its guidance due to broader economic instability. At the beginning of 2024-25, it projected revenue of 1-3%. The company’s worst growth in the past 16 years was during the global financial crisis in 2009-10 when growth fell to 3%.
The bleak forecast led to its American Depositary Receipts (ADRs) shedding about 3% in early trade on NYSE. Infosys’s revenue rose 4.2% in 2024-25, falling short of its projected growth target range of 4.5-5%. Its revenue for the March quarter grew 4.8% year-on-year, but it declined 3.5% sequentially. For 2024-25, its larger peer TCS’s revenue grew by 4.2% in constant currency and Wipro’s declined 2.3% during the same period.Infosys’s margins inched up 0.5% to 21.1% in the last financial year, but it dropped 0.3% sequentially.
“The environment is uncertain, and we will execute our plans with agility by keeping a close watch on the changes,” said Infosys CEO Salil Parekh in the earnings press conference. “We are seeing the deals that we did in the recent quarters are continuing to ramp up. Because of the changes in the economic outlook, there will be some discussions focused on more consolidation and cost pressures with clients. But at this stage, we’ve not seen a change in that.However, the guidance has factored in what we anticipate in different scenarios because all of this is happening in the last few days,” he said. Infosys signed deals worth $11.6 billion in the last fiscal, a 34% decline compared to the 2023-24.
Regarding salary increases for the ongoing financial year, CFO Jayesh Sanghrajka refrained from providing fresh details. However, he maintained his position that the IT firm was proceeding as planned with the increments implemented in Jan and April for the last financial year. Its attrition inched up to 14.1% in the March quarter compared to 13.7% in the Dec quarter.
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