* Q3 profit 23.69 bln rupees versus 21 bln rupees estimate
* Infosys raises fiscal 2012/13 dollar sales forecast
* Shares headed for biggest gain since April 2001
By Harichandan Arakali and Aradhana Aravindan
BANGALORE/MUMBAI, Jan 11 India's No.2 software
services provider Infosys Ltd raised its revenue
forecast after posting stronger-than-expected quarterly profit,
triggering a 15 percent surge in its shares, set for their
biggest gain in more than a decade.
Many investors had dumped shares in the company after a
string of disappointing quarters eroded Infosys' reputation as
the sector bellwether, putting pressure on CEO S.D. Shibulal to
win more deals and make the firm more profitable.
"We continue to gain confidence from a strong pipeline of
large deals," Shibulal said in a statement on Friday. "We remain
cautiously optimistic about the January-March quarter."
The Bangalore-based company unexpectedly raised its sales
forecast for the year ending March 31 to at least $7.45 billion,
including $104 million in additional revenue following its
acquisition of Switzerland-based consultancy Lodestone Holdings.
That would be a rise of 6.6 percent from a year earlier,
compared with a previous forecast for a 5 percent increase.
New deals, including 13 in Europe, helped boost Infosys'
revenue. Spending on IT services by capital markets clients such
as investment banks and brokerages has also improved, Ashok
Vemury, head of Americas and manufacturing, told reporters in
Bangalore after the earnings announcement.
Clients that have signed big contracts with Infosys,
including Harley-Davidson Inc, also accelerated spending
during the quarter, he said.
However, some analysts said it was still too early to
predict a recovery for the company.
"We are positively surprised by Infosys' performance, and
need to study the durability of Infosys' comeback," JPMorgan
said in a research note.
Infosys, for years an investor favourite for exceeding its
targets, stopped providing quarterly guidance in July. It now
provides only an annual revenue forecast.
Analysts had expected Infosys to trim its annual sales
growth to as low as 3.3 percent after the company warned last
month that U.S. clients had cut back on projects and delayed
signing big deals.
"The market was slightly predatory, given that the last two
times the company has disappointed, but this time the organic
guidance is better ... which I think will be taken positively,"
said Rikesh Parikh, vice president for markets strategy and
equities at Motilal Oswal Securities in Mumbai.
PROFIT BEATS ESTIMATES
Infosys, whose customers include Bank of America Corp
and BT Group Plc, said profit for the three
months ended Dec. 31 was 23.69 billion rupees ($434 million)
versus 23.7 billion rupees a year earlier. That compares with
the average estimate of 21 billion rupees in a poll of 16
analysts, according to Thomson Reuters I/B/E/S.
In October-December, Infosys said revenue rose 12 percent to
104.24 billion rupees from 93 billion a year earlier. That
compares with analyst estimates of 96.8 billion rupees. The firm
added 53 clients during the quarter, the strongest pace of
additions in at least five years.
With about 60 percent of its business in the United States,
Infosys is vulnerable to swings in U.S. corporate sentiment and
has been hit hard by project deferrals. The company is also
particularly exposed to discretionary spending in the financial
sector. Its premium pricing has also put off some customers.
Shares in Infosys, valued at about $28 billion, rose 15
percent after the earnings report, headed for their biggest gain
since April 2001. The broader index advanced 0.4 percent
and the sector index climbed 7.4 percent.
In 2012, shares in Infosys slumped 16.2 percent,
underperforming those of larger rival Tata Consultancy Services
Ltd, which rose 8.2 percent.
Tata Consultancy is expected to report a profit gain of
about 12 percent in the quarter, according to Thomson Reuters
data. India's top software exporter, part of the $100 billion
Tata Group, will report its earnings on Monday.
Wipro Ltd, the country's No.3 software services
provider, may report a quarterly profit gain of 6.7 percent,
analysts said. The company, which is restructuring its
non-information technology businesses and focusing exclusively
on IT, will announce its earnings on Jan. 18.
Fourth-ranked HCL Technologies Ltd is expected to
report a 43.8 percent jump in quarterly profit on Jan. 17.
India's $100 billion-a-year IT and back-office outsourcing
sector earns about three-quarters of its revenues from customers
in the United States and Europe, and faces intense competition
from global rivals including IBM, Accenture and