Infosys Ltd on Thursday turned out a standout performance for the third straight quarter, raising hopes of beating industry leader TCS by the end of the current fiscal year.
India’s second largest software services exporter posted a 6.6 per cent year-on-year increase in net profit, at ₹3,465 crore, during the third quarter. Revenue grew 15.3 per cent to ₹15,902 crore.
On a sequential basis, net profit grew 2 per cent while revenues rose 1.7 per cent.
Analysts expected the net profit to be around ₹3,353 crore.
These numbers were reminiscent of the old days when the company exceeded its forecasts.
The bourses reacted positively to the earnings as the company’s stock rose 5 per cent in a weak market before settling at ₹1,128.70, 4.28 per cent higher than Wednesday’s closing price.
CEO Vishal Sikka, who was brought in nearly 18 months ago to set right a company that was witnessing some of its worst days since inception, told reporters that the AiKiDo model, a next-generation service in design thinking that innovates and simplifies existing business models, combined with mining and winning new clients, was bearing results. “…this has helped us to 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.
Guidance raised Sikka also said that on the back of its healthy performance, Infosys has increased its FY16 revenue guidance to 12.8–13.2 per cent in constant currency terms, and 16.2–16.6 per cent in rupee terms on exchange rates as of December 31, 2015.
According to Partha Iyengar, Gartner’s Country Manager for Research, the company has managed to make an impact in the legacy IT outsourcing business as well as new technology areas in the past few quarters.
Strong pipeline Dipen Shah, Kotak Securities’ Senior VP & Head of Private Client Group Research, said newer initiatives such as zero distance, design thinking and automation will shore up the growth rates of Infosys and sustain margins over the longer term.
He added that while the total contract value of orders signed was lower due to a spillover, the company’s pipeline remains strong at $3 billion.
Infosys also named Punita Kumar Sinha, founder and managing director of Pacific Paradigm Advisers and a former senior managing director at the Blackstone Group, as an independent director. She is also the wife of Minister of State for Finance Jayant Sinha.