Indian outsourcing giant Infosys posted revenue of $4.2bn (£2.1bn) for the 2007 financial year, 26 per cent up on $3.1bn (£1.6bn) of sales in 2006, beating analyst estimates.

Net income for the year was $1.2bn (£610m), compared to $850m (£483m) posted in 2006.

The software and services specialist has benefited from European and US companies increasing their spend on outsourced IT services over the past 12 months.

Despite raising the average wages of its Indian employees by about 12 per cent last year, Infosys can still deliver equivalent services at a lower cost than in-house IT departments. The company and its subsidiaries now employ 92,187 people.

Downturn or not, Infosys said it is confident it can retain and win new business from European and US firms looking to reduce their operational costs. The company has forecast revenue of $5.1bn (£2.5bn) for the year ending 31 March 2009.

Europe contributed 29.3 per cent of Infosys’s sales in the fourth quarter of 2007, compared with 26.6 per cent a year earlier. North America generated 60.7 per cent, said the company.