Revenue in dollars, devoid of foreign exchange fluctuations, grew by 1.5% to $3.12 billion
Infosys said it would grow by 0-2 % in the current financial year boosted by large deal wins that are helping India’s second largest software exporter beat Covid-19 blues and also outperform larger rival Tata Consultancy Services (TCS) in the three months to June.
The Bengaluru-headquartered firm reported an 11.5% growth in profits to ₹4,233 crore while revenues rose by 8.5% to ₹23,655 crore in the quarter.
Revenue in dollars, devoid of foreign exchange fluctuations, grew by 1.5% to $3.12 billion. “We see that this whole crisis (of Covid-19 pandemic) has accelerated digital thinking across most large enterprises. We see a lot of demand in areas like cloud, workplace and digital transformation activities,” said Salil Parekh, CEO of Infosys. “Also seeing demand for automation, cost efficiency and in the area of consolidation,” he said.
In contrast, TCS has said its revenue dropped by 6.3% to $5.06 billion in the first quarter of fiscal 2021 owing to disruption caused by the Covid-19 pandemic in its main markets of the US and Europe.
Analysts — who were expecting Infosys’s revenue to also drop by 4-5% and for it to suspend revenue guidance for the year — said they now estimate the once industry bellwether to outperform TCS in this fiscal. “Infosys’ revenue outlook implies that fiscal 2021 will mark the second year in a row where (it) will outgrow TCS,” brokerage Emkay Research said in a note. “The margin outlook implies that Infosys will defend or improve margins this year after (several) years of decline.”
Infosys stock closed up 6.16% at ₹831.45 on the BSE on Wednesday. The results were announced after market hours. Shares of IT companies ended higher on Wednesday and the Nifty IT index rose over 5%. Infosys said it had signed deals of more than $1.74 billion from clients such as GlobalFoundries and Vietnam’s FE Credit.
On Tuesday, it signed a large deal with Vanguard, a US investment management firm to modernise its corporate retirement plan unit and take 1,300 American employees on its rolls. “Notwithstanding the large stimulus programmes in the US and Europe there are still economic uncertainties in those markets as there are still emerging medical scenarios,” said Parekh. “However, with what we have learnt in the first quarter and ongoing strong client connects we feel the strength of our franchise is coming through clearly.”