Country’s second largest IT service exporter Infosys ltd on Thursday announced a better-than-expected 6.6 per cent rise in its third quarter net profit and raised its annual revenue growth forecast, sending its shares up by as much as 5 per cent.
Consolidated net profit rose to Rs3,465 crore, or Rs15.16 per share, in October-December as compared to Rs3,250 crore, or Rs14.22 a share, in the same period a year ago, Infosys said in a statement.
Infosys also raised its annual revenue growth forecast on stronger demand for high-margin automation and other services.
Sales in dollar terms are set to grow between 8.9 per cent and 9.3 per cent in the year ending March 31 as compared with an earlier guidance of 6.4 per cent to 8.4 per cent.
Infosys forecast is in contrast with its bigger rival Tata Consultancy which on Tuesday posted a 0.3 per cent decline in third quarter dollar revenue on seasonal holidays, furloughs in the US and floods in Chennai, and may struggle to end this fiscal year with even an 8 per cent growth.
Infosys Chief Executive Vishal Sikka, who was brought in about one-and-a-half years ago to chart a new strategy, said the strong performance was aided by the firm's innovative solutions and the new technologies it has adopted.
"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.
Consolidated revenues in October-December rose 15.2 per cent to Rs15,902 crore from Rs13,796 crore in the year-ago period.
"We have been able to navigate the quarter, better than our earlier expectations," Infosys Chief Financial Officer MD Ranganath said in the statement. "We will continue to focus on enhancing operational efficiency."
Shares of Infosys were up 4.96 per cent in afternoon trade at Rs1,135.50 apiece, after having risen as much as 5.3 per cent earlier, while the benchmark Sensex was down 1.1 per cent. Infosys said that North America accounted for 62.5 per cent of its revenues, while Europe and India contributed 23.2 per cent and 2.8 per cent, respectively.
Rest of the World (RoW) region contributed 11.5 per cent to the quarter's revenues, it added.
Its liquid assets including cash and cash equivalents, available-for-sale financial assets and government bonds were at Rs31,526 crore as on December 31, 2015 as compared to Rs32,099 crore as on September 30, 2015.
Infosys has named Punita Kumar Sinha, founder and managing director at Pacific Paradigm Advisors, as an independent director, while extended the term of former Cornell University professor Jeffrey Sean lehman by two more years till April 2018.