US financial services starting recovery, says Infosys

Indian offshore IT service provider Infosys said the economic recovery has begun in the US financial services sector and it has predicted double-digit growth for the year.

Indian offshore IT service provider Infosys said the economic recovery has begun in the US financial services sector and it has predicted double-digit growth for the year.

The company reported a profit of $334m in its third quarter ended 31 December. This was a 5.4% increase on the previous quarter and a 0.6% increase on the same period last year.

Revenues were $1.2bn in the quarter, which was a 6.8% increase on the previous quarter and was 5.2% more than in the same period last year.

It expects the full financial year ending 31 March to deliver double-digit growth, with revenues expected to grow between 10.6% and 11.5% compared with the previous year.

BG Srinivas, UK head at Infosys, said there are strong signs of recovery, with the US financial services sector spending again. "We have seen growth in the US banking, capital markets and insurance sectors."

He said the manufacturing and telecoms sectors are also recovering. "We have seen across-the-board growth, but by far the biggest is the financial services sector in the US."

European revenues only grew by 0.9% compared with the previous year. Srinivas said it is not a surprise that Europe is lagging behind the US because it entered recession later. "There are signs of stability in Europe and there is dialogue with customers," added Srinivas.

He said there will be a clearer view of the European markets when IT budgets are set next month. He said although most business in Europe came from existing customers, Infosys did add eight new customers in the last quarter, compared with six in the quarter before. He said very few new customers were added during the height of the recession.

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