Infosys narrows revenue guidance range after Q3 profit beat estimates

Vishal Sikka
Infosys Ltd, India's second biggest software services company, narrowed its full-year revenue guidance range after posting a better-than-expected 7 percent rise in third-quarter profit that was helped by new client wins.

Bengaluru-headquartered Infosys said it expected revenue to grow between 8.4 percent to 8.8 percent in constant currency terms in the fiscal year to March. Its earlier guidance was for an increase of between 8 percent and 9 percent in full-year revenue.

Indian information technology companies such as Infosys have struggled in 2016 as major clients in the United States and Europe, their biggest markets, held back discretionary spending, awaiting clarity on policy changes under U.S. President-elect Donald Trump's administration, and changes following the UK's Brexit move.

A leading Indian IT lobby group late last year forecast weaker revenue growth in 2017 for the $150 billion showpiece sector due to an uncertain global political environment.

Infosys will speed up acquisitions in the United States, its biggest market, and recruit heavily from university campuses there to beat a more protectionist visa regime expected under Trump's administration, the company's chief operating officer Pravin Rao told Reuters in October.

Bigger rival Tata Consultancy Services Ltd said on Thursday it would deepen a focus on expanding its digital business, after beating analyst estimates with a 10.9 percent rise in profit for the quarter to December.

But some analysts expect a pickup in the U.S. banking industry and a recovery in demand in Europe as Brexit fears ease to boost IT spends.

Infosys said it added 77 clients during the three months to December, including two clients in the $75 million-plus revenue category.

Net profit rose to 37.08 billion rupees ($544.03 million) for the three months to Dec. 31 from 34.65 billion rupees a year earlier, ahead of the 35.44 billion rupees on average expected by analysts.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel