BENGALURU: Indian tech giant Infosys hiked its annual sale forecast Thursday and posted an 11.4 percent on-year rise in profit for the December quarter, signaling a gradual revival in client spending. India's second-largest software services exporter earns more than 80 percent of its revenue from Western markets.

It raised its constant-currency revenue guidance for the current financial year to 4.5-5.0 percent, up from an earlier forecast of 3.75-4.5 percent. Net profit rose 11.4 percent year-on-year to 68.06 billion rupees ($785.9 million) for the December quarter, beating analyst estimates of 67.7 billion rupees on average.

Revenue was up 7.6 percent to 417.64 billion rupees for the same period, helped by strong demand from its European market and growth in its financial services, manufacturing and energy markets.

"We continue to strengthen our enterprise AI capabilities, particularly focusing on generative AI, which is witnessing increasing client traction," Infosys CEO Salil Parekh said. "This has led to another quarter of strong, large deal wins", he added.

Part of India's $254-billion IT sector, Infosys grappled with a growth slowdown over the last year as customers curtailed tech spending due to high inflation and global geopolitical uncertainty. But the Bengaluru-headquartered firm has seen demand slowly pick up as inflation cooled off, sparking interest rate cuts and boosting the willingness of clients to spend on technology.

The slowdown hurt the job prospects of thousands of young Indian engineering graduates who depend on the industry, although in recent quarters some firms including Infosys have resumed adding employees to their headcount.

Infosys's headcount increased by 5,591 employees in the December quarter, when compared to the September quarter, according to the company's quarterly filings. Shares in Infosys ended 1.09 percent lower at the close of trading in Mumbai on Thursday ahead of the earnings announcement. – AFP