Infosys’s Business IT Segment Drives Its Overall Business Growth

Infosys’s (INFY) Business IT Services segment, which contributes around 62.0% of its total revenues, has maintained strong growth momentum in the past five quarters. The robust growth in Application Development, Infrastructure Management Services, Testing Services, and Business Process Management drove the overall revenues for Business IT Services in the past five quarters. Growing demand for digital services in various markets led to the Business IT Services segment’s revenue growth.

In the graph above, we can see the revenue growth of the Business IT Services segment in the last five quarters. During this period, it maintained an upward trend in the last five quarters and grew at a CAGR (compound annual growth rate) of 1.9%.

The Application Development and Maintenance businesses grew on an annualized basis by 7.3% and 2.9%, respectively, in fiscal 3Q18. These businesses comprised of the bulk of the revenues for Infosys’s Business IT Services segment. 

During the same period, the combined revenues from both businesses came in at $871.0 million, up 5.0% YoY (year-over-year). In the last five years, revenues on a combined basis grew at a CAGR of 5.5%.

In fiscal 3Q18, the Infrastructure Management Services subsegment’s revenues increased 10.5% YoY to $242.0 million. In the last five quarters, these revenues grew at a CAGR of 2.5%. In fiscal 2017, these revenues increased at a CAGR of 13.8%.

In fiscal 3Q18, key drivers Testing Services and Business Process Management generated revenues of $259.0 million and $146.0 million, respectively, for YoY growth of 11.6% and 16.8%, respectively.

Infosys’s Testing Services and Business Process Management group grew at a CAGR of 10.6% and 8.4%, respectively, in the last five years.