Infosys sales forecast beats estimates after major deal wins

Business Friday 15/April/2016 14:00 PM
By: Times News Service
Infosys sales forecast beats estimates after major deal wins

Bangalore: Infosys forecast better-than-expected sales growth this fiscal year, as India’s second largest software exporter captures new contracts for information technology services.
Sales will rise between 11.8 per cent and 13.8 per cent in US dollar terms for the 12 months ending March, the Bangalore-based company said on Friday. That compares with the 10.5 per cent to 12.5 per cent median growth estimate of four analysts surveyed by Bloomberg News. Infosys is the first of India’s IT giants to report earnings and is seen as a bellwether for the industry.
Spending on artificial intelligence, adding new contracts and keeping hold of staff underpin Chief Executive Officer Vishal Sikka’s drive to boost sales at the company. That strategy has been bolstered by acquisitions as Infosys seeks to deepen its relationship with customers at a time global IT spending is flattening.
"Their client interactions have increased and their ability to bring in deals in traditional service streams has also improved,” said Sudin Apte, Chief Executive and Research Director at Pune-based Offshore Insights. "It is too early to say the tide has turned but clearly they have made good progress.”
In constant currency terms, Infosys forecast sales to rise 11.5 per cent to 13.5 per cent.
The company also reported fourth-quarter earnings, with net income rising 16 per cent to Rs36 billion ($540 million) in the three months ended March, the company said. That compares with the Rs35.2 billion average of estimates compiled by Bloomberg.
Sales in the quarter climbed 23 per cent to Rs165.5 billion compared with analyst projections for Rs164.8 billion.
Global spending on IT has stalled, with Gartner last week cutting its forecast for this year to $3.49 trillion, which is 0.5 per cent below 2015. But Infosys touted several major contract wins in the current quarter, including a deal with food packaging company ConAgra Foods.
"The momentum of large deal wins continued this quarter and bookings were strong,” Chief Operating Officer U B Pravin Rao said in the statement.
Infosys shares closed at Rs1,172.70 on Wednesday in Mumbai and the stock has risen 6.1 per cent this year. Markets in India are closed Friday for a public holiday.