(Reuters) -Infosys Ltd on Thursday forecast revenue growth this fiscal would be the slowest in six years as India's No.2 IT services exporter grapples with lower client spending amid the U.S. banking turmoil and growing fears of a recession.
Infosys said it expects revenue to increase 4%-7% in the year ending March 2024, well below analysts' expectations of 10.7% growth. It posted 3% revenue growth in fiscal 2018.
The demand environment is uncertain, CEO Salil Parekh said in a media call. He said the company saw "unplanned rampdowns" in client projects across sectors like telecom, retail, high-tech and within some areas in financialservices.
The company said it does not have a "clear view" for the fullyear and that the impact was bigger in the United States than in Europe.
Infosys' warning comes a day after larger rival Tata Consultancy Services posted weaker-than-expected fourth-quarter results due to deferred project spending by its North American banking clients.
Infosys also posted a smaller-than-expected 16% increase in fourth-quarter revenue to 374.41 billion Indian rupees ($4.58 billion). That led to fiscal 2023 revenue growth of 15.4%, missing the company's own forecast of 16%-16.5%.
"We view the sharp miss on Q4 revenue, within 90 days of guidance, as very disappointing and (it) begs several questions on demand momentum and execution," JP Morgan said in a note.
Infosys' net profit of 61.28 billion rupees in the January-March quarter also missed analysts' expectations of 66.24 billion rupees, according to Refinitiv IBES.
Infosys said it won large deals worth $2.1 billion in the quarter, less than the $2.3 billion it won a year ago.
The Bengaluru-based company expects an operating margin of 20% to 22% this fiscal year.
The company's U.S.-listed shares dropped 3.5% in trading before the open of the U.S. markets. Its India-listed shares closed down 2.7%, weighed down by TCS's disappointing results.