BENGALURU, Jan 14 (Reuters) - India's No. 2 software services exporter Infosys unexpectedly raised its revenue forecast on Wednesday and signaled a healthy demand outlook, citing steady discretionary tech spending and renewed momentum in its core financial services business.
The forecast lifted its U.S.-listed shares 10% in early trade and came just two days after market leader Tata Consultancy Services flagged strong demand in 2026, pointing to a possible rebound in India's $283 billion IT sector.
Clients who had cut discretionary spending amid tariff-related uncertainty are now funding AI projects.
AI DRIVES RECOVERY HOPES
"There is an industry-wide recovery as certain tech spends can't be postponed beyond a point. It's this incremental improvement in demand that is helping the industry on a gradual recovery path," said Centrum Broking analyst Piyush Pandey, who called Infosys' forecast revision a "positive surprise".
For the fiscal year ending March 2026, Infosys said it expects revenue growth of 3% to 3.5%, versus its own earlier estimate of 2% to 3%.
Three brokerages had expected the company to narrow the range to 2.5%-3%.
"We have become (the) AI partner of choice for (the) largest clients in financial services and energy (sectors). Therefore, we see a good outlook even as we look into the next financial year," CEO Salil Parekh said in a post-results press conference.
Peers Tata Consultancy Services and HCLTech beat revenue estimates on Monday and also talked of AI-led demand.
Third-quarter revenue for Infosys rose 8.9% to 454.79 billion rupees ($5.04 billion), beating the LSEG-compiled average analysts' estimate of 452.27 billion rupees.
Revenue from the financial services segment, which accounts for nearly a third of sales, increased 3.9%.
Infosys, which won AI-led deals with Adobe and Siemens AG in 2025, did not disclose revenue from AI projects. Last month, Accenture beat first-quarter revenue estimates on strong demand for AI-driven IT services.
Net profit for the reported quarter fell 2.2% to 66.54 billion rupees, missing the average estimate of 73.79 billion rupees on a one-time charge of 12.89 billion rupees linked to India's new labour codes.
Large order bookings, defined as deals above $50 million, rose to $4.8 billion from $3.1 billion in the previous quarter and $2.5 billion a year earlier.
($1 = 90.2990 Indian rupees)
(Reporting by Sai Ishwarbharath B and Haripriya Suresh in Bengaluru; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)
