India's second largest software services exporter, reported a 4.9 per cent drop in quarterly profit, smaller than market estimates, sending its stock up 2.5 per cent in a flat market.
The company, which kicked off the sector's results, said October-December net profit fell to 15.6 billion rupees ($346 million) from 16.4 billion a year ago.
Infosys raised its revenue forecast for the full year and said revenue in dollars would rise 1.8-2.0 percent, reversing its October forecast for a drop of 1.0-1.3 per cent.
A Reuters poll had estimated a net profit of around 14.8 billion rupees, a decline of 4 per cent from the previous quarter and down 10 per cent year-on-year.
A global recovery, recent deal wins and stable prices have brightened the outlook for Infosys and bigger rival Tata Consultancy Services, after the world recession hit the sector last year.
Shares in Infosys, valued at $32 billion, rose 13 percent in October-December, in line with the sector index and beating a 2 percent rise in the broader market. The stock more than doubled in 2009.