Infosys shares soar on outlook

January 12, 2013 - 12:43:45 am

BANGALORE: Indian IT outsourcer Infosys yeterday reported a stronger-than-expected quarterly profit and gave an improved outlook for annual revenues, sending its shares soaring.

Consolidated net profit for the Nasdaq-listed firm was flat at Rs23.69bn ($430m) in the October-to-December quarter, against Rs23.7bn a year earlier.

Analysts had expected Infosys to post a lower Rs21bn profit.

The firm’s shares jumped 13.88 percent to Rs2,642.after the firm raised its forecast for full-year revenues in the fiscal year to March 2013, to at least $7.45bn.

Rivals Tata Consultancy Services (TCS), Wipro and Mahindra Satyam also rose about three percent each on optimism over earnings growth.

Analysts were surprised by the positive data from Infosys, which has been struggling to expand its business and has missed sales targets, lost market share and seen stocks slide as revenues from the United States lag. “Infosys’ results signal a turn in trajectory in revenue growth,” said Bhuvnesh Singh of Barclays Capital.

He said the December figure and the full-year outlook “now implies a narrowing of the growth gap versus TCS,” Singh said.

Infosys top brass also expressed confidence. “We have done well in the quarter despite an uncertain environment,” said chief executive S D Shibulal. “We continue to gain confidence from a strong pipeline of large deals. However, the broader economic environment remains difficult.”