17%. The market value of the share jumped by about Rs. 22,400 crore, more than the GDP of Fiji.
That sent a strong new year signal to market analysts who were downgrading the share and forced speculators taking pessimistic bets after eight disappointing quarters to reverse their steps.
The Bangalore-based firm, India’s second largest software exporter, reported a October-December net profit of Rs. 2,369 crore, which was little changed from the year-ago period's Rs. 2,372 crore. But what cheered investors was that the number was far above the analyst estimates that were around Rs. 2,100 crore.
“If this sustains for the next two quarters, it could indicate that the worst phase is behind the company and it can benefit from the strengthening demand environment,” said Partha Iyengar, country manager for industry research firm Gartner.
Total revenue for the third quarter was up 12% at Rs. 10,424 crore, against Rs. 9,298 crore a year earlier, and well above the analyst estimates of Rs. 9,680 crore. The revenues included sales from Swiss consulting firm Lodestone that it acquired in the previous quarter.
The company gained from larger deals as well as a strong control on wages, as it moved to weed out under-performers. It added only 977 employees to its total headcount in the quarter, low by its past record. Total employees stand now at 155,629. The company is sitting on a cash pile of about Rs. 22,501 crore.
Revenue was up 5.7% quarter on quarter. Better expectations in the business environment made Infosys revise its full-year revenue growth expectations from 5% to 6.5% at Rs. 40,746 crore. The company’s shares ended the day on BSE at Rs. 2,712.6 — gaining Rs. 392 on the day.
“We have done well in this quarter despite an uncertain environment,” said SD Shibulal, CEO and managing director. “We continue to gain confidence from a pipeline of large deals. However, the broader environment remains difficult. We remain cautiously optimistic about January-March quarter.”
Despite hurricane Sandy that hit the US, fewer working days in October-December quarter, tough US visa norms that hindered movement of software engineers and pricing challenges Infosys posted a strong quarter driven by eight deals worth $731 million, and a 16.6% growth in business from its second-largest market, Europe and 44% growth in India.
The company added 53 new clients and increased its staff strength by 977 people.
“The bellwether might just be back but we would rather look for more consistency,” said Vimal Gohil, analyst with broking firm Asit C Mehta.