Information technology major Infosys on Friday pulled off a surprise by raising its revenue guidance for this fiscal to at least $7.45 billion from its previous projection of $7.34 billion, sending its shares surging by nearly 17% on the BSE. Infosys also posted a better than expected net profit on the back of eight large outsourcing deals – valued at $731 million -- won during the October-December quarter. Its performance in Europe was commendable; winning 13 new clients and growing the geography by over 16% in revenues during the quarter.
Infosys' shares on the BSE rocketed 16.9%, closing at Rs 2712.60 on Friday. This is its biggest gain since April 2001. Its share price in 2012 had slipped by 16.2% following a series of setbacks, even as its closest rival TCS had surged by 8.2%. In that sense, it is a big turn around in fortunes for Infosys.
The new forecast represents a 6.6% revenue rise from a year earlier. The growth outlook is inclusive of $104 million in revenue from Lodestone, a Swiss-based consulting firm that it acquired last year. The company's net profit stood at $434 million (Rs 2,369 crore) for the quarter, registering a flat growth sequentially. Analysts had expected Infosys to finish with a lower income.
JP Morgan in a note expressed surprise. “We are positively surprised by Infosys' performance and need to study the durability of the company's comeback,” it stated. Some of the analysts had expected Infosys to pare its annual revenue growth to 3.3%, after the company had said last month that US clients had cut back on projects.
The firm's revenues in dollar terms rose by 6.3% sequentially and 5.8% year on year to $1,911 million. In rupee terms its revenues scaled up 5.7% sequentially and 12% on a year-on-year basis to Rs 10,424 crore. Earnings per American Depositary share (EPADS) forecast remain unchanged, at $2.97 at least.
“We have done well in this quarter despite an uncertain environment,” said S D Shibulal, CEO and managing director, Infosys. “We continue to gain confidence from a strong pipeline of large deals. However, the broader economic environment remains difficult. Even so, we remain cautiously optimistic about the January-March quarter”, he added.
The October-December period is widely regarded as the weakest quarter in the IT sector, owing to lower billing days due to the holiday season. That Infosys has managed to pull