Mysore: The country's second-largest software services firm Infosys today posted a 21.4 per cent rise in net profit and raised its revenue growth outlook for this financial year as improving US and European economies revive demand for outsourcing services.
The company's net profit stood at Rs 2,875 crore in the third quarter ended December 31 as against Rs 2,369 crore a year earlier. Revenue rose 25 per cent to Rs 13,026 crore from Rs 10,424 crore, Infosys said in a statement.
"Our Q3 was a decent quarter. We grew by 1.7 per cent in Q3. Our revenue was USD 2.1 billion. The volumes went up by 0.7 percent. The onsite came down by 3.4 per cent and the offshore went up by 2.6 per cent, very much in line with some of the initiatives which we have undertaken over the last two quarters," Infosys CEO and MD S.D. Shibulal said.
He added that the quarter saw good client additions with 54 new customers, including a new USD 50 million client. Infosys raised its revenue growth forecast to 24.4-24.9 per cent for the financial year ending March 31, from 21-22 per cent estimated earlier.
"We are seeing some confidence coming back to our clients but at the same time we expect the budget to be stable from last year to this year. Our clients are very focused on cost optimisation even today," Shibulal said.
Shares of the company rose 2.73 per cent to Rs 3545.35 on the BSE, while the benchmark Sensex climbed 0.76 per cent. "The results of Infosys were a mixed bag. While revenue matched expectations, the margins were better than expectations," said Dipen Shah, Head - Private Client Group Research at Kotak Securities.
Shibulal said the deal pipeline looked decent. "We continue to see momentum in large deal wins. This is driven by client focus on efficiency and cost optimisation. The other area we see activity is digital transformation," he said.
The US and Europe account for more than 80 per cent of the revenue of Indian IT exporters. North America contributed 60 per cent of revenue for Infosys in the third quarter and Europe 24.9 per cent. Competitors Tata Consultancy Services and HCL Technologies have remained bullish on the opportunities presented by the revival in the market after the 2008 economic crisis.
Infosys, on the other hand, has maintained a cautious outlook.
Talking about the exodus of top management personnel from the firm, Infosys Executive Chairman N.R. Narayana Murthy said, "Let me make a cryptic comment -- it is good for them and good for the company and we wish them the best as they have added value to the organisation." He said the company has set up a leadership institute and also has a large number of enthusiastic and energetic people.
Infosys co-founder Murthy was brought back to head the IT major in June, following quarters of laggard performance. In dollar terms, Infosys' profit grew 6.7 per cent to USD 463 million in the October-December quarter from a year earlier, while revenue rose 9.9 per cent to USD 2.1 billion. Infosys increased its dollar revenue growth guidance for this financial year to 11.5-12 per cent from 9-10 per cent earlier.
"During the quarter, we saw early but promising results of our initiatives to increase efficiency in our operations," Infosys Chief Financial Officer Rajiv Bansal said, adding that the company remains focused on making investments to secure and grow its future. Infosys had liquid assets, including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds valued at Rs 27,440 crore as of December 31 against Rs 26,907 crore at the end of September.
Though Infosys added 6,682 employees on a gross level in the quarter, the total head count fell by 1,823 from the end of September to 1,58,404. The attrition rate stood at 18.1 per cent on the basis of the last 12 months. It added 54 clients during the reported quarter.
Next: Infosys shares up 3% as Q3 results beat estimates
Infosys shares up 3% as Q3 results beat estimates
Mumbai: IT bellwether Infosys' scrip on Friday rose by 3 per cent after the company's third quarter earnings beat street estimates.
Shares of Infosys gained 2.84 per cent to settle at Rs 3,548.9 on the BSE. During the day, the stock jumped 3.59 per cent to Rs 3,575.20.
At the NSE, the stock closed the day at Rs 3,556, up 3.05 per cent from its previous close.
The scrip was the best performer among the blue-chips on both Sensex and Nifty.
"Infosys' revenue was in-line but operating profit margin was a positive surprise and an early indicator of the fruition of management's efforts towards transforming the company to a 'desirable Infosys'. The results will likely drive marginal upgrades in earnings," said Ashish Chopra, IT Analyst, Motilal Oswal Securities Ltd.
According to Ankita Somani, Research Analyst IT, Angel Broking: "We believe that the impact of current high level exits could be felt in the medium term. However, a company like Infosys is system driven with a healthy management bandwidth and hence the impact will not be long lasting.
"The current set of results as well as guidance given is largely in-line with expectations and factored in the stock, which limits a sharp the upside potential for the script in the immediate future."
Meanwhile, buying was also seen at other IT counters, where TCS ended 1.70 per cent higher, while Wipro was up 2.55 per cent.
The BSE IT index settled 2.16 per cent higher at 9,313.63. In the broader market, the benchmark Sensex ended at 20,758.49, up 45.12 points.
