Infosys misses profit estimates as costs surge
India’s Infosys Ltd on Sunday reported June-quarter profit that missed estimates, hurt by higher employee expenses, but the IT services company raised its annual revenue outlook, citing a strong demand outlook.
Infosys’ larger IT rival Tata Consultancy Services and also smaller rivals such as HCL Technologies and Wipro have seen their margins erode as they battle a higher sector-wide talent churn and try to retain employees.
Overall expenses surged more than 29%, while operating margins for Infosys for the June quarter came in at 20.1%, down 3.6% year-on-year. The company also retained its operating margin guidance for full year at 21%-23%.
The company was making investments in talent through hiring and competitive compensation revisions, which will impact margins in the immediate term, Nilanjan Roy, chief financial officer, Infosys said in a statement.
However, Bengaluru-based Infosys expects revenue growth of 14%-16% for…