Infy profit surges 11%; co ups full-yr revenue guidance
Infosys, India's second-largest IT services company, posted a better-than-expected 11.4% increase in consolidated net profit at Rs 6,806 crore for the December quarter from the year earlier, driven by a healthy rebound in the financial services and manufacturing segments. Europe, the company's second-largest region after the US, reported double-digit revenue growth. Profit was up 4.6% sequentially.
Infosys did better than peers Tata Consultancy Services (TCS) and HCLTech in terms of beating analyst expectations, while echoing similar sentiments regarding an «improvement in discretionary spends» in select segments in core geographies. This persuaded the Bengaluru-based company to raise its revenue guidance for the full fiscal year ending March to 4.5-5.0% in constant currency terms from 3.75%-4.50% earlier, marking a second upgrade in a row. Operating margin outlook continued to remain at 20-22%.
Infosys CEO & MD Salil Parekh said financial services was strong in the US as well as Europe and discretionary spends are showing signs of improving in the latter region. The auto sector in Europe remains slow, he added.
«Most people and economists have a view that the economy (in the US) will do better,» Parekh said, outlining improved deal pipelines. «That's what our clients are saying (too). But we'll wait and see. We have a business that works in those growth situations, in the cost situations, so we're feeling quite confident in terms of outlook.»
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