India’s second-largest software services exporter, Infosys, on Friday posted its January-March quarter earnings, which were above analysts expectations, with a 0.6% sequential increase in revenues at Rs 21,539 crore.

However, the company lowered its revenue forecast for FY20 to 7.5%-9.5% in constant currency, from 8.5%-9.0% in FY19. Net profit during the period increased 12.6% sequentially to Rs 4,078 crore. Revenue in dollar terms rose 9.1% y-o-y to $3,060 million. Digital revenues at $1,035 million (33.8% of total revenues) grew 2.3% sequentially in constant currency terms.

The company’s revenues for the full year increase by 17.2% to Rs 82,675 crore but net profit saw a dip of 3.8% at Rs 15,410 crore. Operating margin during the January-March quarter declined 120 basis points on a sequential basis to 21.4%, the lowest in 11 quarters.

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Infosys MD and chief executive Salil Parekh said that investments to “future proof” the company affected margins and raising sub-contractor costs due to shortage of talent onsite would not affect margins. Infosys also lowered its operating margin guidance for FY 20 in the range of 21%-23%. Operating profit during the quarter stood at Rs 4,618 crore, a 4.4% decline sequentially and a 3.3% growth year on year.

Infosys reported net profit of Rs 4,078 crore for the quarter against Rs 3,690 crore a year earlier. That compared with an average estimate of Rs 3,956 crore by 33 analysts, Refinitiv Eikon data showed.

Parekh said that India’s second-biggest software exporter expects its digital business to maintain high double-digit growth in the future.

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“We are at a much more stable place (from where) we were 12 months ago,” he said. “We had given ourselves a three-year period to become fully functioning in terms of stability, momentum and acceleration.”

Infosys expects full-year revenue to rise by 7.5-9.5% on a constant currency basis, with an operating margin of 21-23%, the company said on Friday.

Indian tech companies gained prominence by giving Western clients low-cost solutions to problems such as the Y2K bug and then gradually helped to shape changes in international business as outsourcing expanded.