India's Infosys Technologies beat expectations with a 21 percent rise in quarterly profit thanks to a weaker rupee, and raised its full year guidance on hopes for a revival in outsourcing demand.
The No. 2 information technology services company forecast revenue for the year to March 2009 would grow 27.5-29.5 percent, in rupee terms, up from April's forecast of 19.2-21.1 percent.
"Although the global economic environment continues to remain unstable and could impact IT spending in the short term, we see several opportunities for growth as customers focus on improving efficiency," CEO and Managing Director S. Gopalakrishnan said.
Infosys , which develops applications, designs supply chains and
offers back-office services, said on Friday net profit rose to 13.02 billion rupees ($303 million) in the first quarter ended June from 10.79 billion rupees reported a year earlier.
A Reuters poll of 15 brokerages had estimated a net profit of 12.69 billion rupees for Infosys, which counts ABN AMRO, Goldman Sachs, Philips Electronics, and U.S. insurer Conseco among its more than 500 clients.
Pricing had remained stable in the June quarter, Infosys said, but margins were impacted by wage increases and visa costs. The currency market was expected to remain volatile in the short term, it said.
Nasdaq-listed Infosys is the first to report quarterly earnings among Indian IT companies, which had annual revenues of around $52 billion in 2007/08.
A large pool of English-speaking graduates and comparatively cheaper wages had helped Indian firms ride an outsourcing boom for years, but the growth slowed last year when Wall Street banks made huge write-downs related to the subprime crisis and as the U.S. economy lurched towards recession.
Although Indian outsourcing firms are expanding to Europe, Asia and the Middle East to lower their dependence on the United States, the country still accounts for half of their sales.
Shares in Infosys, which is valued by the market at $23 billion, had risen 21 percent in the June quarter, outperforming a gain of 13 percent in the sector index and a 14 percent drop in the main Mumbai index.