Infosys Records 6.6 Per Cent Rise in Profit
Infosys Ltd reported a better-than-expected 0.6% rise in the third quarter dollar revenue and raised its revenue growth outlook for the current fiscal year as the outsourcing company sets the stage for a strong comeback after years of listless financial performance.
India’s second largest software exporter on Thursday said its revenue for the quarter that ended in December was $2.41 billion, compared with $2.39 billion in the previous quarter. In constant currency, its revenue grew 1.1%.
A Bloomberg survey of 28 analysts forecast the company to report revenue of $2.36 billion in the quarter.
The company said its net profit grew 6.6% to Rs.3,465 crore from Rs.3,250 crore a year earlier. Its revenue grew more than 15% to Rs.15,902 crore.
Chief executive Vishal Sikka said the company’s strong performance was aided by its innovative solutions and the new technologies it has adopted. “This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth,” Sikka said.
For the year that ends in March, Infosys now expects its revenue to grow 8.9% to 9.3%. In October, it had cut its fiscal year forecast to a growth of at best 8.4%, citing sharp fluctuations in currencies. The company had then retained its revenue outlook in constant currency at 10% to 12%.
In constant currency, the company now expects its revenue to grow at best 13.2%.
In the fiscal year that ended in March, Infosys’s revenue grew 5.6% to $8.71 billion.
Infosys’s strong outlook gives the Bengaluru-based company a lead over its larger rival Tata Consultancy Services Ltd (TCS), which two days ago posted a 0.3% decline in third quarter dollar revenue and may struggle to end this fiscal year with even an 8% growth.
TCS cited persisting issues in some of its business segments such as insurance and seasonal weaknesses that stem from the holidays at the end of the year during Christmas. Its growth was hobbled by a flood that stalled operations at its facilities in Chennai that cater to its overseas outsourcing clients.
Infosys’s strong results cheered investors who mostly dumped TCS shares on Wednesday in the wake of its sustained weak financial performance for the last six quarters.
On Thursday, Infosys shares rose as much as 5.3% to Rs.1,139.80 on BSE, while the benchmark Sensex fell 1.2% to 24,552.18.
Infosys—which was until recently a troubled software company that constantly underperformed the Street’s and its own growth expectations—started recovering over the last few quarters under the leadership of CEO Sikka who took charge in mid-2014.
Since taking charge, Sikka has been pushing the company to shift tack to adopt latest technologies and create intellectual property-driven solutions offering, as against the traditional way of solving problems using manpower.