Infosys CEO and Managing Director Salil Parekh (Right) with Infosys CFO Nilanjan Roy. Photo: AFP / The TImes of India

Indian software giant Infosys posted double-digit growth in the first quarter and increased its revenue outlook, as global businesses stepped up their digital services during the pandemic.

The Bangalore-based company reported a net profit of 51.95 billion rupees (US$ 696 million) during the quarter, up 23% on an annual basis, and up 2.3% sequentially. On a constant currency basis, the firm grew 16.9% year-on-year and 4.8% from the preceding quarter.

Its revenue grew 17.9% from the year-ago quarter at 454.11 billion rupees ($6.09 billion) and 6% from the preceding quarter. Digital revenue stood at 53.9% of the total, and on a constant currency basis, it grew 42.1% year-on-year.

Infosys CEO and MD Salil Parekh praised employees’ “resilience and commitment in delivering for our clients. This gives us the confidence to increase our revenue growth guidance to 14-16%.”

The company also maintained its margin forecast for the fiscal year 2021-22 at 22-24%.

India’s second-largest IT services company registered a yearly growth of over 20% in seven out of its eight verticals. The company had a total contract value of $2.6 billion for the quarter and bagged 22 large deals (nine in the banking and financial services segment, and four each in retail and utility services).

During the quarter, the world’s largest steelmaker, ArcelorMittal, chose Infosys to help accelerate its digital transformation and enable next-generation application management and business process management services for its Europe operations. Infosys also bagged a deal with Britvic, a leading soft drinks maker in Europe, to provide IT services across applications and infrastructure.

The company’s attrition rate rose to 13.9% from 10.9% from the preceding quarter. Chief Operating Officer UB Pravin Rao said it was a concern but reflects the current market condition. “We are taking steps to keep up with the supply side. We have hired 8,000 associates this quarter. We are also increasing our global campus hiring to 35,000. This quarter we’ve added 10,000 and the rest will be spread across the three quarters,” he said.

Chief Financial Officer Nilanjan Roy said, “We remain confident of delivering on the margin guidance, underpinned by our comprehensive cost optimization program, despite increasing cost headwinds arising largely from compensation review, talent acquisition and retention.”