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Entrepreneur
6 days ago
- Business
- Entrepreneur
Indian IT Companies See Strong Growth in European Region
The ongoing uncertainties in the US market have also encouraged Indian IT companies to focus more on expanding their footprint in Europe You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Top Indian IT services firms are witnessing strong growth momentum in the European market as businesses are accelerating their digital transformation initiatives, seeking cost-effective solutions, and facing a shortage of skilled tech talent – all fortes of Indian IT companies. For the first quarter ended June, Infosys' Europe business 12.3 per cent on a year-on-year basis in constant currency, which is over 3 times the company average. Europe, the second largest geography for the company, contributed 31.5 per cent to the total revenue. In comparison, North America, the largest geography, grew merely 0.4 per cent and contributed 56.5 per cent to the total revenue as of Q1. "I think the growth in Europe in last multiple quarters and years is on back of a few things. We are one of the first companies a few years back to call out Europe as an opportunity. We have made, on back of that hypothesis, investments in Europe. And that has helped us win some of the very, very large and mega deals in Europe. So that has definitely helped from the growth in Europe perspective. There are consolidation deals that we have won as well in Europe. So that has helped. And over a period of time, Europe is also opening up from outsourcing perspective," Jayesh Sanghrajka, CFO, Infosys said in an analyst call. Going forward, he said there are enough opportunities in Europe. "Now whether it will continue growing beyond the company growth or not, I do not think we are giving a guide on that. But where we are standing today, we are seeing opportunity in Europe. And many of the large deals are sitting in Europe as well as the pipeline contain a good amount of large deals in Europe." Noida-based HCLTech's Europe business grew 9.6 per cent in constant currency and contributed 28.3 per cent to the total revenue as of the June quarter. In comparison, the US grew only 0.5 per cent. A leading Europe-based telecommunication company selected HCLTech to modernize its technology and operations stack. The partnership will enable zero-touch operations through hyper-automation powered by GenAI. Also, a Europe-based automotive major selected HCLTech to deploy workplace management and agentic AI solutions to enhance operational efficiency and service quality, improve customer experience, and support new technologies. Wipro's European business declined 11.6 per cent in constant currency in Q1 but the management believes the overall market remains positive. "The pipeline continues to be strong in Europe. And in the BFSI sector, specifically in Europe, we have a good pipeline. And having said that, the large Phoenix deal that we won in Q4, we are going through the final planning phases. And actually, the revenue will start coming in Q3. That can give a good momentum for us in Europe. Second, we also are staying focused on some of these deals, which are cost takeouts and vendor consolidation," Srini Pallia, CEO and MD, Wipro said in a post-earnings call. Analysts believe overall, major Indian IT firms are witnessing increased deal momentum in the European market. "This surge can be attributed to several factors: European businesses are accelerating their digital transformation efforts, seeking cost-effective solutions, and facing a shortage of skilled IT talent—all areas where Indian IT companies excel. Furthermore, these firms have successfully navigated strict European regulations like GDPR and have strengthened their local presence through acquisitions and partnerships. The ongoing uncertainties in the US market have also encouraged Indian IT companies to focus more on expanding their footprint in Europe. Additionally, all these companies are strengthening their regional presence by setting up more delivery centres, which enhances both their onshore and nearshore capabilities," said Biswajit Maity, Senior Principal Analyst at Gartner.
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Business Standard
31-07-2025
- Business
- Business Standard
For India's IT cos, growth in Europe may only be a temporary relief
With demand for information-technology (IT) services in North America still sluggish, Europe has become a source of optimism for Indian companies because it is delivering steady gains over the past two years and continuing to outperform in the latest quarter. Yet analysts caution a full-scale revival will require a rebound in the United States (US), particularly in manufacturing, retail, and BFSI (banking, financial services, and insurance), because Europe contributes only about a third of the revenues. Companies like Infosys and Tata Consultancy Services are benefiting from large outsourcing deals, rising research & development (R&D), and increasing cloud and AI (artificial intelligence) adoption by European enterprises. For example, Infosys' growth in Europe over the past three years has far surpassed that in North America and the company's overall growth. Even in the first quarter of FY26, Europe was up 12.3 per cent, compared to North America at 0.4 per cent, on a constant-currency basis over a year earlier. 'There are consolidation deals we have won in Europe. So that has helped. And over time, Europe is also opening up from the outsourcing perspective. That is helping in growth,' Infosys Chief Financial Officer Jayesh Sanghrajka told analysts. The company is also benefiting from a pipeline of large deals in the continent. Experts say European enterprises historically invested just a fifth of what US firms allocated to tech R&D. In emerging areas like AI, private investment in the US outpaced that in Europe by three to four times, contributing to higher costs and slower modernisation across industries. Nitin Bhatt, partner and technology-sector leader, EY, said IT expenditure in Europe was expected to grow 8-10 per cent in 2025 over the previous year, marking the strongest annual growth since the pandemic. 'The narrative is shifting. Over the past few years, European companies have accelerated their R&D investment, with growth rates surpassing those of US firms for the first time in over a decade. Key sectors, such as manufacturing, banking, and public services, are embracing cloud and sustainability-linked initiatives to digitise operations and enhance competitiveness. Early adopters, particularly in financial services, have demonstrated the value of offshoring critical functions, leading to the broader acceptance of outsourcing across industries,' added Bhatt. TCS separates UK revenue from what it earns in continental Europe. UK revenue was up 4 per cent and continental Europe 0.7 per cent, while North America was down 1.8 per cent. 'With the trade uncertainty and the new spending on defence stimulating the economy, Europe has become a more attractive market for Indian firms,' said Peter Bendor-Samuel, founder and executive chairman, Everest Group. Wipro, whose fortunes have moved the other way, has been hit by some of its client-specific problems in the continent. The company, however, expects to return to trajectory from the third quarter as soon as revenue from the $500 million Phoenix deal kicks in. 'The growth drivers for IT companies in Europe include rising need for cost-optimisation deals to reduce tech spend, technology adoption as European firms aim to build tech capabilities to maintain sovereignty, and reducing dependency on the US. Key sectors powering growth are manufacturing in Germany, shipping and logistics in northern Europe, and financial services across the continent. Demand is particularly strong in cloud computing, generative AI, digital transformation, and cybersecurity,' said Gaurav Vasu, founder, data intelligence firm UnearthInsights. Sanghrajka said it would be difficult to ascertain whether Europe would continue growing. When asked if the geography was only a fall-back option till the larger market gets its mojo back, Bendor-Samuel said: 'This looks less like a permanent shift and more like Europe being on a stronger trajectory at this time,'
Hans India
24-07-2025
- Business
- Hans India
Big-ticket deals help Infy raise guidance for FY26
Infosys posted a sound set of first quarter numbers as it recorded strong sequential growth in revenues with robust deal Bengaluru-headquartered company increased the lower end of its revenue growth guidance for FY26 to 1-3 per cent from 0-3 per cent earlier. In the April-June quarter, Infosys reported an 8.7 per cent increase in its consolidated net profit to Rs6,921 crore. Its revenue stood at Rs42,279 crore, a rise of 7.5 per cent over the same period of last year. In dollar term, revenue was at $4.94 billion, an increase of 2.6 per cent sequentially in constant currency term. 'Our growth in Q1 was broad-based. Our large deal wins stood at $3.8 billion. A large driving factor is our success in enterprise AI (implementation). The economy worldwide has come to a stable situation, but it is not fully settled. As we get closer, we narrowed our guidance keeping in mind the changes seen in the US and Europe,' Salil Parekh, CEO of Infosys, said in the post results press conference. 'We have benefited from deployment of AI agents and from consolidation (deals) that clients have looked at us and being positive,' he added. For the quarter, operating margin of Infosys was at 20.8 per cent, a dip of 20 basis points from previous quarter. The company maintained its operating margin guidance of 20-22 per cent for the whole financial year. 'We continue to leverage Project Maximus to make investments in strategic priorities to drive profitable growth,' JayeshSanghrajka, Chief Financial Officer of Infosys, said. During the June quarter, financial services vertical grew 5.6 per cent YoY basis, while manufacturing vertical rose 12.2 per cent. Energy vertical saw a growth of 6.4 per cent, while retail grew marginally at 0.4 per cent.
Business Standard
24-07-2025
- Business
- Business Standard
Infosys slides after Q1 PAT drops 1% QoQ to Rs 6,921 cr; revises FY26 revenue guidance to 1%-3%
Infosys dropped 1.08% to Rs 1,557.45 after the company's consolidated net profit declined 1.59% to Rs 6,921 crore despite a 3.31% increase in revenue from operations to Rs 42,279 crore in Q1 FY26 over Q4 FY25. On a year on year (YoY) basis, the companys net profit and revenue jumped 8.68% and 7.54%, respectively in Q1 FY26. Profit before tax (PBT) stood at Rs 9,740 crore in Q1 FY26, up 0.8% QoQ and 7.97% YoY. Operating profit in the first quarter of FY26 was at Rs 8,803 crore, up 2.7% QoQ and up 6.2% YoY. Operating margin declined to 20.8% in Q1 FY26, compared to 21% in Q4 FY25 and 21.1% in Q1 FY25. During Q1 FY26, constant currency (CC) revenue grew by 3.8% YoY and 2.6% QoQ. In dollar terms, the IT firm reported revenues of $4,941 million, registering a 4.8% year-on-year growth for the quarter ended 30th June 2025. In Q1 FY26, free cash flow stood at $884 million, registering de-growth of 19.2% year on year. The total contract value (TCV) of large deal wins was $3.8 billion in Q1 FY26, with a net new of 55%. The companys total clients stood at 1,861 as on 30th June 2025 as compared with 1,867 clients as on 30th June 2024. The IT major has informed that the voluntary attrition rate (LTM IT Services) came in at 14.4% in Q1 FY26, up from 14.1% in Q4 FY25 and 12.7% in Q1 FY25. For FY26, the company has revised its revenue growth guidance to 1%3% in constant currency (CC), up from the earlier range of 0%3%. The operating margin forecast remains unchanged at 20%22%. Salil Parekh, CEO and MD, said, Our performance in Q1 demonstrates the strength of our enterprise AI capabilities, the success in client consolidation decisions, and the dedication of our over 300,000 employees. Our large deal wins of $3.8 billion reflect our distinct competitive positioning and deep client relationships. Jayesh Sanghrajka, CFO, said, Q1 performance is a clear reflection of our unwavering focus on multiple fronts resulting in strong growth at 2.6% QoQ, resilient margins at 20.8% and EPS increase of 8.6% YoY. We continue to leverage Project Maximus to make investments in strategic priorities to drive profitable growth and enhance shareholder value, cash flow conversion was well above 100% for the fifth consecutive quarter. The impact of currency volatility was effectively managed through our proactive hedging strategy. Infosys is a global leader in next-generation digital services and consulting.
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Business Standard
24-07-2025
- Business
- Business Standard
Analysts stay bullish on Infosys after steady Q1 show; Should you buy in?
Infosys Ltd. retained bullish calls from several brokerages after the information technology (IT) major posted better-than-expected earnings for the first quarter of the current financial year (Q1FY26). As the tech firm only raised the lower end of its revenue guidance, analysts said that this reflects heightened global uncertainties. The net profit of Bengaluru-based company came in at ₹6,921 crore, marking a sequential decline of 1.6 per cent. The top line grew 3.3 per cent on quarter-on-quarter (Q-o-Q) to ₹42,279 crore. Both the numbers beat Bloomberg estimates, where analysts had estimated a net profit of ₹6,778 crore and revenue of ₹41,724 crore. The second-largest software-services provider raised the lower end of its guidance to 1 per cent from nil growth it had guided a quarter earlier. A quarter of strong deal wins worth $3.8 billion helped the company raise the guidance at the lower end, Chief Financial Officer Jayesh Sanghrajka said. For the IT giant, financial services and manufacturing, which contributed 28 per cent and 16 per cent to the top line, respectively, were up 5.6 per cent and 12.2 per cent. Growth in manufacturing was a contrast at a time when other companies have seen their revenue hammered due to tariff fears. Analysts on Infosys Q1 results Infosys reported decent Q1 results, with revenue in constant currency (CC) terms significantly ahead of estimates, Nuvama Institutional Equities said. Infosys delivered solid growth, both in magnitude and quality, supported by a reduction in third-party revenue, the brokerage said. While the guidance upgrade was modest, it appears reasonable in light of prevailing macro uncertainties. Nuvama retained their 'Buy' rating with a revised target price of ₹1,850 per share from ₹1,700 apiece earlier. The operating environment remains challenging for Infosys across several verticals, particularly where discretionary spending is under scrutiny, analysts at Centrum Broking said. Segments such as communications, high-tech, and retail continue to witness cautious IT budgets, while financial services and energy offer opportunities, it said. Despite macro headwinds, Infosys' hiring plans for FY26 remain intact, indicating management's confidence in deal conversions and execution capabilities, according to Centrum Broking. The 'Buy' rating was maintained with a revised target price of ₹1,942 apiece. The company narrowed its FY26 revenue growth guidance, reflecting its Q1 performance, robust large deal wins, M&A contribution, and prevailing macroeconomic uncertainty, analysts at Emkay Global said. It expects the first half of the year to outperform the second half. The upper end of the guidance assumes macro stability, while the lower end factors in risks from further deterioration in the external environment, Emkay said. The brokerage maintained FY26-28 earnings estimates and reiterated their 'Buy' rating with a target price of ₹1,750 per share. ALSO READ:
