Infosys Technologies Ltd., India software exporter, posted profit that beat analysts’ estimates and agreed to pay a special dividend as the rebounding global economy boosts demand for information technology services. Net income rose 13 percent to 17.4 billion rupees ($394 million) in the three months ended in September, from 15.35 billion rupees a year earlier, Bangalore-based Infosys said today. That compared with the 17 billion rupee average of 31 analyst estimates compiled by Bloomberg. Infosys will also pay a special dividend of 30 rupees a share.
Revenue growth was broad-based, with gains in financial services, manufacturing and retail. The company said revenues this fiscal year ending March would grow 24.0 percent to 25.0 percent in dollar terms, to between $5.95 billion and $6 billion. It offered more muted guidance in rupee terms of 18.5 percent to 19.4 percent growth, due to a strengthening rupee against the dollar. Company reported net sales of Rs 6947 crore as against Rs 6198 crore n quarter-on-quarter basis (QoQ), accounting for 12.08 per cent surge; while standalone net sales came up at Rs 6425 crore from Rs 5758 crore, accounting for rose 11.58 per cent rise.
The company raised its full-year profit and sales forecasts as it joined Intel Corp. among major technology companies indicating corporate spending is recovering. Chief Executive Officer S. Gopalakrishnan, who cut prices in 2009, said last month that billings have stabilized amid a global economic revival. “Project proposals were strong in the previous few quarters, and those are going to start translating into earnings now,” said Shashi Bhusan, an analyst with Prabhudas Lilladher Pvt. in Mumbai who has a “buy” rating on Infosys stock.
IIFL Capital analyst Rajiv Mehta said better than expected volume growth bodes well for India’s outsourcing industry, but the “disappointing” rupee guidance may weigh on the Infosys share price. “Overall, the revenue scenario is getting stronger day by day,” he said. But, he added, “If you try to value the stock in light of the sharp run-up we’ve seen in the last month, it seems like the stock will correct.”
With its strong numbers, Infosys has set a positive tone for the upcoming quarterly results from Indian IT. Over the past few days, the benchmarks on the BSE and NSE have been greatly influenced by the expected results from technology sector.
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