Infosys shares jumped over 10% on Tuesday after the software services exporter reported a 5% year-on-year rise in first quarter net profit and raised its US dollar revenue guidance for the full year.
The Bangalore-based company's April-June quarter net profit rose 5% from a year ago, down 2% quarter-on-quarter, to Rs 3,030 crore and revenue was up 12% year-on-year, 7% sequentially, to Rs 14,354 crore.
The 7% quarter-on-quarter revenue growth was highest in 15 quarters and volume growth at 5.4% quarter-on-quarter was highest in 19 quarters, Infosys said.
Once bellwether, Infosys has lagged behind peers like Tata Consultancy Services (TCS) and Cognizant in recent years. A business revamp initiated by its first non-founder CEO and MD Vishal Sikka seems to be working for now.
"Our efforts in redesigning our clients’ experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients," said Sikka.
Company US dollar revenue rose 4.5% quarter-on-quarter to $2.26 billion and it raised the dollar revenue guidance for FY-2016, now expecting a growth in the 7.2-9.2% range, compared with 6.2-8.2% earlier, a sign that the company is more confident of the future. It also maintained its constant currency revenue guidance at 10-12% for the year.
"Infosys reported robust Q1 FY-16 earnings as dollar revenues were ahead of our and consensus estimates while margins were in line. Growth was led by manufacturing, retail, North America and the rest of the world," said brokerage firm ICICI Direct.
Another domestic brokerage also gave a thumbs up to Infosys's strong show, saying the fastest dollar revenue growth in the last 10 quarters signals an excellent start to FY-16.
In afternoon trading, Infosys shares were up 9.8% at Rs 1,100.10 on the Bombay Stock Exchange (BSE). It was the highest gainer on the Sensex on Tuesday.
Infosys revamp under Vishal Sikka brings in more large deals, profit up