Infosys has predicted a lower growth in sales that previously expected. The company has announced expected revenue growth of between 1% to 3.5% in the year through March 2024, a significant drop from the 4% to 7% growth it had projected beforehand, Bloomberg reported.

India’s software services sector has been hit by a decline in outsourcing, which had previously soared due to the pandemic.

The downturn is the result of global uncertainty in demand as counties fear an impending recession.

Despite the Bangalore-based companies’ forecast, it continues to predict growth due to the progress of new technology, investing heavily in generative artificial intelligence (AI).

The Indian technology consulting and outsourcing company reported first quarter revenues of $4.6m.

Infosys signed a deal with one of its clients to offer AI and automation services, planning to invest $2bn in their development.

The agreement includes “automation led development, modernization and maintenance services,”, Infosys said in an exchange filing.

Infosys’ CEO Salil Parekh, said in a statement that the business’ AI capabilities were expanding with 80 client projects.  

“Topaz, our comprehensive AI offering, is resonating well with clients. We see this being transformative for clients and enhancing our overall service portfolio” he said.

“We have expanded the margin improvement program with a holistic set of actions for the short, medium and long-term, working on five key areas, supported by our leadership team”,

Rival Tata Consultancy Services has said it will invest in AI development itself, training 25,000 engineers to get them certified on Microsoft’s Azure Open AI.

The firm’s CEO Ganapathy Subramaniam, told CNBC that AI would make an “enormous impact on the way that we operate and the way that we do things” explaining the company had adopted a “machine-first” approach to project delivery.