- Sales projected to grow as much as 13.8% in U.S. dollar terms
- India's No. 2 software exporter is capturing new IT business
Infosys Ltd. forecast better-than-expected sales growth this fiscal year, as India’s second largest software exporter captures new contracts for information technology services.
Sales will rise between 11.8 percent and 13.8 percent in U.S. dollar terms for the 12 months ending March, the Bangalore-based company said Friday. That compares with the 10.5 percent to 12.5 percent median growth estimate of four analysts surveyed by Bloomberg News. Infosys is the first of India’s IT giants to report earnings and is seen as a bellwether for the industry.
Spending on artificial intelligence, adding new contracts and keeping hold of staff underpin Chief Executive Officer Vishal Sikka’s drive to boost sales at the company. That strategy has been bolstered by acquisitions as Infosys seeks to deepen its relationship with customers at a time global IT spending is flattening.
“Their client interactions have increased and their ability to bring in deals in traditional service streams has also improved,” said Sudin Apte, Chief Executive and Research Director at Pune-based Offshore Insights. “It is too early to say the tide has turned but clearly they have made good progress.”
Infosys U.S.-traded shares rose the most in almost nine months, increasing as much as 11 percent to $20.47. They were trading at $19.90 at 10:46 a.m. in New York. Markets in India were closed Friday for a public holiday.
In constant currency terms, Infosys forecast sales to rise 11.5 percent to 13.5 percent.
The company also reported fourth-quarter earnings, with net income rising 16 percent to 36 billion rupees ($540 million) in the three months ended March, the company said. That compares with the 35.2 billion rupee average of estimates compiled by Bloomberg.
Sales in the quarter climbed 23 percent to 165.5 billion rupees compared with analyst projections for 164.8 billion rupees.
Global spending on IT has stalled, with Gartner Inc. last week cutting its forecast for this year to $3.49 trillion, which is 0.5 percent below 2015. But Infosys touted several major contract wins in the current quarter, including a deal with food packaging company ConAgra Foods Inc.
“The momentum of large deal wins continued this quarter and bookings were strong,” Chief Operating Officer U B Pravin Rao said in the statement.