Infosys raises full-year sales forecast as Q3 profit, revenue rise

Infosys Ltd, India’s second-largest IT services company, on Thursday raised its revenue guidance for this financial year after reporting higher quarterly sales that boosted its shares in a weak market.

The company reported revenue for the three months through December at $2.41 billion, up 0.6 per cent sequentially in dollar terms and 8.5 per cent higher from a year earlier. Net profit showed marginal year-on-year and quarter-on-quarter growth at $524 million.

The company now expects its revenue for 2015-16 to grow 12.8-13.2 per cent in constant currency and 8.9-9.3 per cent in US dollar terms, compared with 10-12 per cent and 6.4-8.4 per cent estimated earlier, respectively.

Shares of Infosys jumped after the earnings and were trading 4.7 per cent higher at Rs 1,133.30 on the BSE just before noon while the broader market was down 0.4 per cent.

Infosys has shown better results than its larger rival Tata Consultancy Services Ltd, which announced its third-quarter results a couple of days ago. TCS reported 5.5 per cent year-on-year growth and marginal sequential decline in revenue at $4.5 billion for the October-December quarter.

Infosys, which faced high level of attrition till a few quarters ago, seems to have attained stability. The attrition rate fell to 13.4 per cent from 18.2 per cent a year earlier. In the financial year so far it has added 33,000 new employees, taking its total workforce to 193,383. Its client base grew from 890 to 1,045 during the same period. It added 34 new clients on net basis in the third quarter alone.

"We are starting to see creative confidence blossoming within Infosys,” said Vishal Sikka, managing director and CEO about the upturn in growth.

"Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth," he said.

Infosys had launched in August three enhanced service offerings in design thinking, platforms and knowledge-based IT branded ‘Aikido services’.

During the quarter, Infosys completed the acquisition of Noah Consulting, LLC, a provider of advanced information management consulting services for the oil and gas industry. It also invested in WHOOP, an early-stage company that offers a performance optimization system for professional sports teams, and in CloudEndure, a startup that provides cloud migration and cloudbased disaster recovery software during the quarter.

Meanwhile, Infosys appointed Punita Kumar Sinha as an independent director with immediate effect. Punita, a 25-year veteran in private equity, is the founder and managing partner of Pacific Paradigm Advisors, an Asia-focused independent investment advisory firm.

Punita was previously senior managing director, chief investment officer and senior portfolio manager at Blackstone Asia Advisors and managing director and senior portfolio manager at Oppenheimer & Co/CIBC World Markets. She had joined as independent director of Prem Watsa-led India-focused investment platform Fairfax last year. Punita is married to Jayant Sinha, minister of state for finance who previously worked with Omidyar Network.

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