Infosys Surges by Record on Higher Annual Sales ForecastKartikay Mehrotra
Infosys Ltd., India’s second-largest software exporter, surged by a record in Mumbai trading after raising its full-year sales forecast.
The company jumped 17 percent, the most since the stock’s debut in 1993, according to data compiled by Bloomberg. It was the largest gainer on the BSE India Sensitive Index, followed by competitors Wipro Ltd. and Tata Consultancy Services Ltd.
Infosys increased its sales forecast about 3 percent to 407.5 billion rupees ($7.4 billion) as it reported better-than-expected profit for the third quarter. The Bangalore-based company signed eight large outsourcing deals in the period, worth a total of $731 million, as it looks to boost volumes in lower-cost projects.
“Infosys’s transformation strategy may be beginning to see some results,” Suresh Mahadevan, managing director at UBS Securities India Pvt., told Bloomberg TV India. Today’s numbers “have been a positive surprise,” he said.
Net income was 23.7 billion rupees in the three months ended December, little changed from a year earlier, Infosys said today. That surpassed the 22.4 billion-rupee median of 42 analyst estimates compiled by Bloomberg.
The company has a “strong pipeline of large deals” and is “cautiously optimistic” about the current quarter, Infosys Chief Executive Officer S. D. Shibulal said today.
In the U.S., the company is benefiting as the government shifts its spending focus to health care and other civilian services from defense, said Ashok Vemuri, the head of Infosys’s business in the Americas.
“Across the board in America, we’ve seen good traction,” Vemuri said. The government spending move “is good news for us,” he said.
The software-services company closed at 2,712.10 rupees. Tata Consultancy, Infosys’s bigger competitor, climbed 3.8 percent to 1,306.35 rupees, and Wipro surged 6.2 percent, the most since July 2009, to 419.95 rupees.
Infosys added 53 clients during the quarter, it said. It also completed the acquisition of management consultancy Lodestone Holding AG.
The developer pared hiring plans by about 5,000 people last quarter to limit costs. The company writes software programs, as well as provides IT and outsourcing services for customers including BP Plc and AT&T Inc.
“This was a very positive quarter compared to expectations,” Bhavan Suri, an analyst at William Blair & Co., told Bloomberg TV India from Chicago. Management had also lowered expectations “tremendously” in the weeks before the results, he said.