Infosys on Thursday reported a 7 per cent growth in net profit for the first quarter of the fiscal at ₹6,368 crore against ₹5,945 crore a year ago, beating the estimates of analysts, which had forecast a bottomline in the region of ₹6,250 crore.

The Bengaluru-based IT services giant also raised its revenue growth forecast for the fiscal to 3-4 per cent in constant currency terms from the earlier 1-2 per cent, with a pick-up in the critical financial services vertical.

Infosys’s operating margin during the quarter stood at 21.1 per cent against 20.8 per cent a year ago. It expects its operating margin to be 20-22 per cent in the current fiscal year.

“We had an excellent start to 2024-25 with strong and broad-based growth, operating margin expansion, robust large deals and the highest ever cash generation. This is a testimony to our differentiated service offerings, enormous client trust and relentless execution,” Infosys managing director and CEO Salil Parekh said.

With rivals TCS and HCL Tech also topping estimates, optimism is growing that the
IT services sector is beginning to see a revival in growth after few a quarters of subdued demand as enterprises cut costs amid elevated interest rates.

Parekh told the media the company raised the revenue guidance for the year on account of its strong performance in the first quarter and the pickup in the financial services business, particularly in the US, that gave the company a better visibility for the year.

During the quarter, Infosys saw its revenues rising 3.6 per cent to ₹39,315 crore from ₹37,933 crore in the year-ago period, a jump of 3.6 per cent, against analyst estimates of revenues of ₹38,900 crore.

In dollar terms, revenues rose 2.1 per cent to $4.7 billion against $4.6 billion in the same period of the previous year.

Financial services is the largest contributor to Infosys by business segment. It showed a constant currency growth of 0.3 per cent in the first quarter against a fall of 8.5 per cent in the preceding three months. ``We are seeing some recovery in US financial services, specifically in the areas like mortgages, capital markets and card payments and the larger clients there. So we are seeing some early signs of recovery in those areas,’’ Parekh said.

In terms of geographies, while North America witnessed a drop of 1.2 per cent (2.2 per cent in the previous quarter), Europe showed a growth of 9.1 per cent, while the rest of the world rose 2.3 per cent. India, which contributes to 3.1 per cent of its revenues by geographies, witnessed a jump of 19.9 per cent.

Infosys expects to hire 15,000-20,000 freshers depending on the growth during the year.