Shares of the country's second largest IT company, Infosys, rose as much as 3.36 per cent from day's low to hit an intraday high of Rs 1,519 after it reported better than expected December quarter earnings and raised its revenue guidance for current financial year post market hours on Thursday.
The Bengaluru-based company net profit of Rs 6,586 crore, up 9 per cent sequentially from Rs 6,026 crore in the previous quarter and up 13 per cent annually from Rs 5,809 crore during the same quarter last year.
Analysts on average had expected a profit of Rs 6,500 crore, according to Refinitiv IBES data.
The sharp up move in profit came on the back of strong large deal wins. The company won large deals worth $3.3 billion and December quarter was the best in last eight quarters, the company said.
Infosys' revenue from operations rose nearly 5 per cent, quarter-on-quarter (QoQ) to Rs 38,318 crore compared with Rs 36,538 crore in the previous quarter. In dollar terms, its revenue rose 9.6 per cent annually to $4,659 million and posted annual revenue growth of 13.7 per cent in constant currency terms.
Infosys expects revenue growth of 16 per cent to 16.5 per cent for the financial year to March, from revenue growth of 15 per cent-16 per cent projected earlier.
Revenue from digital business comprised 62.9 per cent of overall revenues and grew at 21.7 per cent in constant currency. Operating margin for the quarter remained resilient at 21.5 per cent, Infosys said.
“We have kept our FY23/FY24 EPS estimates broadly flat but tweaked our FY25 EPS estimate to account for better growth after the strong 3QFY23 result. We view INFO as a beneficiary of acceleration in IT spends, given its capabilities around Cloud and Digital transformation. We value the stock at 26x FY24E EPS and reiterate our Buy rating for target price of Rs 1,760 per share,” brokerage firm Motilal Oswal said in a report.
As of 2:09 pm, Infosys shares traded 2.5 per cent higher at Rs 1,517 and was top gainer in the 30-share Sensex.
