(Bloomberg) -- Infosys Ltd. forecast tepid sales growth for the year, a sign that overseas clients are limiting tech spending until the global economy picks up speed.

India’s second-largest outsourcing provider said Thursday revenue will grow 1% to 3% on a constant-currency basis in the year through March 2025. That compared with the average analyst estimate of 6.2%. The company also projected an operating margin of 20% to 22%.

“We’ve  had good traction in large deals, some of which will flow through in the next year given the duration of those deals,” Infosys Chief Executive Officer Salil Parekh told a news conference in Bangalore. “Keeping that in mind, our growth guidance for next year is, as a band, higher than where we finished for this year.”

Infosys’ American Desposity Receipts fell after the weak sales guidance.

The country’s nearly $250 billion information technology industry is seeking to emerge from a slowdown caused by elevated interest rates and inflation as well as uncertainty brought about by Russia’s war on Ukraine. Bigger rival Tata Consultancy Services Ltd., which doesn’t give a sales forecast, last week said the current fiscal year will be better than the previous one.

Infosys also said its net income rose to 79.7 billion rupees ($954 million) for the fourth quarter through March 2024. Analysts expected 61.6 billion rupees on average. Revenue climbed 1.3% to 379.2 billion rupees.

Sectors such as financial services have a better outlook for fiscal 2025 compared with the previous year, while the manufacturing industry could have a slower growth, Parekh said, adding that clients were focused on trimming costs.

What Bloomberg Intelligence Says

“Infosys’ fiscal 2025 outlook of sales to rise 1-3% in constant currency appears sensible, reflecting the uncertain economic climate, and has the potential to improve as the year progresses. We expect pressure on discretionary tech spending to linger through the rest of the year, especially in the banking and TMT sectors, possibly prolonged with rising tension in the Middle East.”

-Anurag Rana & Andrew Girard, analysts 

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Shares of Infosys have advanced 13% over the past year as investors assess its chances of boosting sales growth and expanding to higher-margin services such as those involving artificial intelligence. Rivals TCS and Wipro Ltd., meanwhile, have each advanced more than 20%.

Separately, Infosys announced it had acquired automotive solutions provider in-tech Holding GmbH for 450 million euros ($480 million) in cash. Sales from the German company were not included in Infosys’ sales forecast.

(Updates with CEO comments in third and sixth paragraphs.)

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