Infosys Raises Revenue Forecast
January 14 2016 - 4:00AM
Dow Jones News
SINGAPORE—Indian outsourcing company Infosys Ltd. on Thursday
raised its full-year revenue forecast after reporting a 6.6%
increase in its fiscal third-quarter net profit, a sign the
software exporter is weathering challenges posed by a new age of
computing.
Indian outsourcers, which have long employed relatively
inexpensive labor to manage call centers and write code for foreign
companies, are trying to reinvent themselves by increasingly
providing new kinds of data-intensive offerings, known as digital
services, that global clients want.
Bangalore-based Infosys, India's second-largest software
exporter by sales, said profit in the three months ended Dec. 31
stood at 34.65 billion rupees ($517 million,) a 6.6% rise from a
year earlier. Revenue grew 15.3% to 159.02 billion rupees.
The company raised its revenue forecast for the current
financial year. It expects revenue to grow between 8.9% to 9.3% in
dollar terms for the year ending March 2016, up from an earlier
forecast of 6.4% to 8.4%. In the second quarter, the company
revised its revenue forecast lower.
The quarter revealed "stellar numbers from Infosys," which show
the company is "positioned for a turnaround," said Dinesh Goel, a
partner at outsourcing consultancy ISG India. Mr. Goel said he is
more optimistic about the company than he has been for several
years, with the firm especially making progress in its digital
services
Chief Executive Vishal Sikka "seems to be having quite a
positive impact," said Apurva Prasad, an analyst at Indian
brokerage Reliance Securities. Mr. Sikka, a veteran of German
software company SAP SE, took charge of Infosys in 2014 and has
said his vision is to spur innovation within the industry
bellwether.
Infosys doesn't break out the revenue it receives from these
digital services, but Mr. Sikka told The Wall Street Journal in an
October interview that the firm is seeing increased demand for
them, and that its work in emerging fields like the Internet of
Things constitute some 28% to 30% of its revenue.
The company in February said it was acquiring automation
technology provider Panaya, Inc., and in June announced its
acquisition of digital commerce company Skava. Expertise from such
firms might already be helping to boost Infosys's digital
offerings, said Amar Mourya, an analyst at brokerage IndiaNivesh
Securities Pvt. Ltd.
India's Tata Consultancy Services Ltd., the country's biggest
outsourcer by revenue, on Tuesday said profit in the three months
ended Dec. 31 stood at 60.83 billion rupees, compared with 53.28
billion rupees a year earlier. The company said revenues from
digital services increased 4% from the previous quarter, and were
responsible for 13.7% of total sales.
Wipro Ltd., another of the country's large outsourcing firms,
releases its results for the quarter on Monday.
--Debiprasad Nayak contributed to this article.
Write to Newley Purnell at newley.purnell @wsj.com
(END) Dow Jones Newswires
January 14, 2016 03:45 ET (08:45 GMT)
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