India's Infosys sees profit leap by 25%, beats forecasts

April 15, 2014

Indian outsourcing giant Infosys on Tuesday reported quarterly net profit rose by a surprise 25 percent, lifted by new European and US contracts, as it forecast an increase in annual revenues.

The Nasdaq-listed firm announced consolidated net profit climbed to 29.92-billion rupees ($496 million) in the January-March quarter from 23.9-billion rupees in the same year-earlier period.

Analysts had expected Infosys to report a profit of 28.1 billion rupees.

Shares of the company leapt by as much as four percent after Infosys, India's second largest IT services exporter by sales, forecast revenues would climb seven to nine percent in US dollar terms for the financial year that began in April.

Infosys, based in the southern high-tech city of Bangalore, said it had signed 50 new clients in the quarter including Chinese-owned Swedish carmaker Volvo.

The company is "firmly focused on building the growth momentum by making all the necessary investments in our business", Infosys chief executive S.D. Shibulal said in a statement.

But Shibulal tempered his outlook by stating that while the company had secured new customers, clients were taking longer to seal transactions due to a challenging business environment.

The company's shares rose by as much as 4.20 percent to 3,371.80 rupees Tuesday before retracing to trade 1.50 percent higher at 3,284.40 rupees.

Dipen Shah, private client group research head at Mumbai's Kotak Securities, called the company's revenue outlook "encouraging".

"Initiatives being taken by management should lead to higher growth," Shah said.

Infosys has seen a string of departures by senior staff since co-founder and business icon N.R. Narayana Murthy returned last June in a bid to reboot the company's fortunes.

Shibulal, who himself has announced plans to retire early next year—or sooner—if a successor is found, downplayed the exits.

"We're a 165,000-strong organisation and the number of people in leadership positions is one percent of that. So if you count the number of (senior figure) exits, you can do it on fingers of two hands," Shibulal told business news channel CNBC.

Infosys—created three decades ago by Murthy and six others around a kitchen table—has been losing market share to rivals such as Tata Consultancy Services and HCL.

Last October, Infosys said it would pay $34 million to the US government to settle an investigation into alleged visa fraud by the company.

Many of India's IT outsourcing firms have reported subdued growth in recent years due to a sharp global economic slowdown.

Explore further: India's Infosys sees weaker sales, shares tank

Related Stories

India's Infosys sees weaker sales, shares tank

March 13, 2014

Shares of Indian outsourcing giant Infosys slid almost nine percent Thursday after the firm warned that quarterly revenues may be weaker-than-expected following project cancellations.

Infosys profits up slightly despite currency woes

July 12, 2013

Indian software outsourcing giant Infosys posted slightly higher quarterly profit Friday and maintained its revenue growth forecast despite the weak rupee and uncertainty about U.S. visas for its employees.

India's Wipro shares tumble as revenue lags

October 23, 2013

Shares in India's third largest IT outsourcer Wipro slumped more than eight percent on Wednesday, a day after it announced modest revenue growth that lagged rivals, analysts said.

India's Infosys cuts revenue outlook, shares tumble

July 12, 2012

Shares in Indian software giant Infosys fell more than eight percent on Thursday after the company announced a surprise cut its full-year revenue outlook and reported a lower-than-expected profit.

Recommended for you

Cryptocurrency rivals snap at Bitcoin's heels

January 14, 2018

Bitcoin may be the most famous cryptocurrency but, despite a dizzying rise, it's not the most lucrative one and far from alone in a universe that counts 1,400 rivals, and counting.

Top takeaways from Consumers Electronics Show

January 13, 2018

The 2018 Consumer Electronics Show, which concluded Friday in Las Vegas, drew some 4,000 exhibitors from dozens of countries and more than 170,000 attendees, showcased some of the latest from the technology world.

Finnish firm detects new Intel security flaw

January 12, 2018

A new security flaw has been found in Intel hardware which could enable hackers to access corporate laptops remotely, Finnish cybersecurity specialist F-Secure said on Friday.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.