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Infosys Q3 Profit Up 13%, Beats Estimates

Infosys Ltd, India's second-largest software services exporter, beat forecasts and maintained its sales growth outlook for the year, citing strong demand from clients in its largest market the United States.
Infosys Q3 Profit Up 13%, Beats Estimates

Bengaluru: Shares in software services exporter Infosys Ltd rose almost 7 per cent on Friday after it surprised investors by sticking to its full-year sales target, thanks to healthy demand that helped offset the impact of a stronger dollar.

Infosys, which posted a 13 per cent rise in third-quarter profit, confirmed it expects sales growth of 7 to 9 per cent for the year ending in March 2015, in constant currency terms and based on exchange rates for the September quarter.

Analysts said the rate at which it was adding new clients, 59 in the quarter, meant the company should hit that target.

"It was quite a positive quarter for the company, in what is traditionally a lull ... That really tells us that the deal pipeline is strong. That was quite a surprise," said Ankita Somani, tech analyst with MSFL Research.

Chief executive Vishal Sikka was brought in last year to chart a new strategy.

Under Sikka, the company, once a trendsetter for India's more than $100 billion IT outsourcing industry, has made a push for new age technologies such as machine learning and artificial intelligence, which the CEO has said will help Infosys hit annual revenue growth rates of 15-18 per cent over time.

On Friday, Infosys said it was also using its workforce more efficiently, with a utilization rate of 82.7 per cent excluding trainees, its highest in 11 years.

Attrition, or the number of people leaving or retiring, fell in absolute terms to 8,900 employees in the third quarter from 10,100 in the quarter before.

IT companies depend on huge numbers of engineers to work on different projects. Significant departures hurt their ability to get new business.

For the third quarter, the company, which provides IT services to clients including Apple Inc, Wal-Mart Stores and Volkswagen, posted a quarterly profit of Rs 3,250 crore ($520.9 million).

Revenue in the period rose 5.9 per cent to Rs 13,796 crore.

Shares of the Bengaluru-based company closed up 5 per cent at Rs 2074.45.

($1 = 62.3925 rupees)

Copyright @ Thomson Reuters 2015

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