Infosys Revamp Brings in More Large Deals; Shares Surge 15%

Mumbai: IT services provider Infosys Ltd on Tuesday said a business revamp initiated by its first non-founder boss helped it win more large deals in the first quarter, fuelling a 5 per cent rise in net profit.

Shares of Infosys surged 15 per cent after the announcement, in which the Bengaluru-based company raised its closely watched US dollar-denominated revenue estimate for the year.

Infosys, a bellwether for India's $150 billion (Rs 9,55,050 crore) IT services industry, has in recent years struggled to innovate and retain market share due to a staff exodus that also hurt its ability to win big deals.

Under Chief Executive Vishal Sikka, brought in about a year ago to chart a new strategy, Infosys has made bets on automation and other high-margin services such as artificial intelligence and digital technology to regain ground lost to rivals including leader Tata Consultancy Services Ltd.

"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," Mr Sikka said in a statement.

Infosys added 79 clients in April-June, taking its total to 987. Client wins included a multi-year contract from a major German bank for application maintenance services, digital and mobility services, package implementation, and testing services.

Infosys also said it kept its rupee-denominated revenue growth view for the business year through March at a range of 10 per cent to 12 per cent. But it raised its outlook in dollar terms to 7.2 per cent to 9.2 per cent, from 6.2 per cent to 8.2 per cent.

For April-June, Infosys said order growth rose 5.4 per cent from three months prior, the most in nearly five years. That was bolstered by a surge in demand in the United States, its biggest market, where the company is also listed.

Infosys, which provides IT services to firms such as Apple Inc, Volkswagen AG and Wal-mart Stores Inc, posted Rs 3,030 crore ($475.85 million) in net profit in the quarter. That beat the Rs 2,886 crore of a year earlier, and roughly matched the Rs 3,020 crore average estimate of 27 analysts, Thomson Reuters data showed.

Revenue rose 12.4 per cent to Rs 14,354 crore, Infosys said.

Staff attrition, or the number of employees leaving or retiring, was 14.2 per cent, from 23.4 per cent a year earlier.

Shares of Infosys were up 9.55 per cent at Rs 1,097.60 in Tuesday noon trade.

($1 = Rs 63.6750)