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    INFY   INE009A01021


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Infosys Ltd : Infosys retains 2013/14 revenue outlook, shares surge

07/12/2013 | 12:50am EDT
File photo of employees of Indian software company Infosys walking past Infosys logos at their campus in the Electronic City area in Bangalore

BANGALORE (Reuters) - Infosys defied some analysts' expectations and retained its revenue growth forecast for the full year, a sign that India's second largest software services exporter was confident it could regain lost market share.

Most analysts had expected Infosys to maintain its forecast for 6-10 percent revenue growth for the current 2013/14 financial year, but Morgan Stanley raised doubts last week, saying the company would cut estimates to 4-6 percent.

Investors cheered the forecast, sending Infosys shares nearly 15 percent higher to their loftiest in almost three months.

"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.

"We need to watch whether the management sees any air pockets going forward."

Infosys's revenue growth forecast still lags the 12-14 percent growth outlook for the sector made by local IT industry lobby National Association of Software and Services Companies, highlighting the challenges facing the company's management.

The company also has to regain investors' trust its ability to deliver strong earnings after almost two years of disappointing results.

Last quarter, Infosys forecast full-year sales growth that missed analyst expectations by a margin of up to 50 percent, sending its shares down as much as about 20 percent.

"Infosys has beaten our lowered expectations and its guidance has been maintained," said Sandip Sabharwal, CEO of Portfolio Management Services at Mumbai-based brokerage Prabhudas Lilladher which holds Infosys stock.

"One shouldn't be too euphoric though for the stock as there are a lot of management and structural changes that need to happen."

An attempt to earn a bigger share of revenue from proprietary software, at the expense of IT outsourcing contracts, saw Infosys losing out to rival Tata Consultancy Services.

Infosys brought back founder Narayana Murthy as executive chairman on June 1 to revive the company, and his efforts 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 financial crisis.

On Friday, Infosys reported a 3.7 percent year-on-year increase in its consolidated net profit for the first quarter, in line with analysts' expectations.

"Despite facing an uncertain macro environment, changing regulatory regime and a volatile currency environment, we have done well in Q1 and are cautiously optimistic about rest of the year," CEO S.D. Shibulal said in a statement.

Infosys also said its margins may be affected in future quarters due to previously announced compensation increases. In June, the company had said it would raise salaries for all eligible staff.

At 0430 GMT, shares of the company were up 12 percent at 2,827 rupees after touching 2,905.60 rupees, their highest since April 11.

($1 = 59.7850 Indian rupees)

(Additional reporting by Sumeet Chatterjee and Abhishek Vishnoi; Writing by Aradhana Aravindan; Editing by Miral Fahmy)

By Harichandan Arakali

ę Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
INFOSYS LIMITED 1.22% 1763.85 Delayed Quote.40.46%
MORGAN STANLEY -0.62% 102.91 Delayed Quote.50.17%
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Analyst Recommendations on INFOSYS LIMITED
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Sales 2022 1 185 B 16 054 M 16 054 M
Net income 2022 221 B 2 993 M 2 993 M
Net cash 2022 305 B 4 139 M 4 139 M
P/E ratio 2022 33,6x
Yield 2022 1,84%
Capitalization 7 391 B 100 B 100 B
EV / Sales 2022 5,98x
EV / Sales 2023 5,23x
Nbr of Employees 267 953
Free-Float 84,8%
Duration : Period :
Infosys Limited Technical Analysis Chart | INFY | INE009A01021 | MarketScreener
Technical analysis trends INFOSYS LIMITED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 37
Last Close Price 1 763,85 INR
Average target price 1 826,62 INR
Spread / Average Target 3,56%
EPS Revisions
Managers and Directors
Salil S. Parekh Chief Executive Officer, MD & Executive Director
Mohit Joshi Co-President
Ravi Kumar S. Co-President & Deputy Chief Operating Officer
Nilanjan Roy Chief Financial Officer
Nandan M. Nilekani Non-Executive Chairman
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