* Q1 profit 23.74 bln rupees vs 23.3 bln estimates
* Keeps FY14 dollar revenue growth forecast 6-10 pct
* Shares rise as much as 15 pct after results
By Harichandan Arakali
BANGALORE, July 12 Infosys Ltd hopes a
return to aggressively chasing deals, even those with low
margins, will help it regain lost market share but cut-throat
competition and a possible change in U.S. visa rules may derail
A focus on proprietary software at the expense of IT
outsourcing contracts prompted India's second largest IT
exporter to post two years of disappointing results and left it
struggling to compete with local rivals Tata Consultancy
Services Ltd and HCL Technologies Ltd.
After reporting its latest quarterly earnings on Friday, CEO
S.D. Shibulal said big IT contracts were now a priority. Infosys
also maintained its revenue growth forecast for the current
2013/14 financial year, defying some expectations that it would
cut its target if the business outlook remained poor and sending
its shares up as much as 15 percent.
"We are definitely more aggressive in going after growth,"
Shibulal said. "We are definitely making progress in our efforts
to win large IT outsourcing deals."
"The majority of the deals are re-bids and they are price
sensitive. The trick is, in the short term they are margin
dilutive, but we have to ensure that they are margin neutral
over the life of the contract," he added.
Infosys said it had added 66 new clients in the fiscal first
quarter that ended June 30. A re-bid is a contract that is up
Investors cheered Infosys' results and strategy turnaround,
sending its shares to their loftiest in almost three months.
But the revenue growth forecast of 6-10 percent still lags
the 12-14 percent outlook for the sector made by local IT
industry lobby National Association of Software and Services
And looming large over all Indian IT companies is the
possibility that the United States, the sector's biggest market,
will implement as early as next year new visa rules that will
make it more costly and difficult to send workers there.
Infosys derives 62 percent of its earnings from North
America and is the most exposed of its rivals to the region.
"Generally you can conclude that the worst is over for them
but it remains to be seen how quickly they can recover from
here," said Phani Sekhar, fund manager at Mumbai-based Angel
Broking, which holds shares in Infosys.
Infosys, and its rivals, may get a boost from forecasts that
2014 will see the strongest demand for technology from U.S.
government institutions and businesses since the 2008 global
Regaining investors' trust remains a challenge. Infosys
stock lost 16 percent of its value last year, but the company
has pinned its hopes for a revival on founder Narayana Murthy
whom it brought back as executive chairman in June.
At 0815 GMT, shares of the company were up 9.4 percent at
2,764 rupees after touching 2,905.60 rupees, their highest since