Infosys, India’s No. 2 software services exporter, met forecasts with a 9.7-per cent rise in second-quarter profit as a weak rupee boosted margins, but it cut its full-year revenue outlook and warned about global economic uncertainty.
Infosys, which counts Goldman Sachs, BT Group and BP among its main clients, cut its dollar revenue growth forecast to 17.1 per cent to 19.1 per cent for the fiscal year, from 18 per cent to 20 per cent projected earlier.
“The global macroeconomic environment is still uncertain. It is and should be a concern for the IT industry,” S.D. Shibulal, chief executive officer of Infosys, said in a statement.
India’s $76 billion showpiece IT sector, which feeds off increased outsourcing by companies looking to cut costs, is expected to face pricing pressure and a decline in new orders as Europe struggles with a debt crisis and the United States sees an economic slowdown.
More than half of Bangalore-based Infosys’ revenue is generated in the United States. Europe is its second largest market.
Infosys, also listed in New York, said on Wednesday.
consolidated net profit rose to Rs 19.06 billion ($387 million) for the fiscal second quarter ended September 30, from Rs 17.37 billion reported a year ago.
Revenue rose 16.6 per cent to Rs 80.99 billion, as the firm added 45 clients in the quarter.
A Reuters poll of brokerages had forecast a profit of 1Rs 8.91 billion on revenue of Rs 81.20 billion for the company, which counts Goldman Sachs, BT Group and BP among its main clients.
Infosys shares rose more than 5 per cent folling the news on Wednesday, touching Rs 2630.20 a share.
“The results have been helped partly by the depreciation in the rupee. The main thing to watch out for will be how the US and Europe will move in the coming months,” said R.K. Gupta, Managing Director at Taurus Asset Management.
“But Indian IT companies and Infosys in particular have a cost advantage over their global peers. I am not very pessimistic on these companies,” he said.
Infosys, worth about $29 billion, has lost more than a quarter of its market value this year, roughly in line with a 25 per cent fall in the sector index, but higher than a 19 per cent decline in the Mumbai market index.