Infosys misses profit targets due to rising costs; increases annual revenue outlook

Due to greater staff costs, Infosys’ June quarter profit fell short of expectations, but the IT services provider increased its sales outlook.

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The IT services provider Infosys Ltd. posted a June quarter profit on Sunday that fell short of expectations due to rising staff costs, but it increased its annual revenue prediction due to robust demand expectations.

The Bengaluru-based company projects sales growth of 14% to 16% for the fiscal year ending in March, a small improvement over its April prediction of 13% to 15%.

In line with its April prediction, Infosys maintained its operating margin target for the year at 20% to 23%.

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For the June quarter, Infosys’ operating margins were 20.1%, which was a decline of 3.6% from the same period last year.

The margins of Infosys’ larger IT rival Tata Consultancy Services as well as smaller rivals like HCL Technologies have shrunk as they fight a higher rate of talent churn throughout the industry.

Infosys announced that its consolidated net profit was 53.60 billion rupees ($12.53 million), up from 51.95 billion rupees a year earlier.

Refinitiv data reveals that analysts had projected a profit of 56.26 billion rupees.

To 344.70 billion rupees, operating revenue increased by 24%.