Infosys Quarterly Profit Rises 21.4% To Rs 2,875 Crore, Beats Estimates

MYSORE: Infosys, India’s second-largest software services provider, beat expectations, with a 21.4% rise in fiscal third-quarter profit.

Profit for the three months ended December 31, rose to Rs 2,875 crore from Rs 2,369 crore for the year earlier period, Infosys said in a statement to the Bombay Stock Exchange on Friday.

“The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives,” said S D Shibulal, CEO and Managing Director. “We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share.”

Ebitda margins in Q3 increased to 25 per cent against 23.57 per cent in previous quarter.

The company has increased its FY14 dollar revenue guidance to 11.5-12 per cent against 9-10 per cent earlier.

"During the quarter, we saw early but promising results of our initiatives to increase efficiency in our operations," said Rajiv Bansal, Chief Financial Officer. "We continue to remain focused on making investments necessary to secure and grow our future," he added.

Infosys founder NR Narayana Murthy has been making a series of changes at the company, getting it to refocus on winning large outsourcing contracts and accelerate growth.

Murthy returned to Infosys as executive chairman in June, after a strategy to sell proprietary software based services and consultancy didn’t take off as anticipated, and the company lost market leadership to rivals over a period marked by missed forecasts and disappointing results.

A broad pickup in demand in United States, and growing interest in offshore outsourcing in continental Europe, is expected to augur well for India’s $108 billion outsourcing industry.

The US accounts for close to two-thirds of the sector’s revenue and India’s IT companies are expected to grow faster in 2014 than they did in 2013.

Sales rose 25% in rupee terms to Rs 13,026 crore from Rs 10,424 crore.