Infosys Technologies, India’s second-largest software exporter, beat market estimates with a sharp rise in quarterly profit on Wednesday and raised revenue and earnings forecasts, sending its shares as much 6.2 percent higher.
The company said it planned to sell up to 30 million shares in its latest offering of sponsored American Depositary Receipts (ADRs), which could be valued at nearly $1.5 billion at its closing price on the Nasdaq on Tuesday.
Infosys first sold ADRs and listed on Nasdaq in 1999. It subsequently made two sponsored ADR offerings, one in 2003 and in 2005.
At 0500 GMT shares of Infosys were up 4.1 percent at 1,984.20 rupees after touching a record 2,024 rupees earlier. The company reported a 53.5 percent rise in quarterly profit, as outsourcing demand outstripped rising salary costs.
“The profit is better than expected — the buoyancy in its business is the reason and is now visible to all,” said Jignesh Shah, head of equity at ABN Amro private banking. “Operating profit margins have also improved much higher than what was estimated by the street.”
Nasdaq-listed Infosys said it had added 45 new clients and the pricing environment continued to be stable.
Infosys, which the market values at $22.8 billion, raised its 2006/07 revenue forecast to 138.53-138.99 billion rupees, up 45.5-46 percent from a year ago, and forecast full-year earnings per share of 66 rupees, up 46.6 percent from a year ago.
July-September Indian GAAP net profit rose to 9.30 billion rupees ($203 million) from 6.06 billion rupees a year earlier, beating a median net profit forecast for 8.5 billion rupees in a Reuters poll of 14 brokerages.
Infosys develops applications, designs supply chains and offers back-office facilities, and ranks behind Tata Consultancy Services Ltd. (TCS) in India’s $23 billion software services export industry. The company has roughly doubled its revenue over the past two business years to more than $2 billion.
India’s booming software and back-office industry, which gets 90 percent of its revenue from overseas clients, expects exports to rise 27-30 percent to $29-31 billion in the year to March 2007.
Contracts worth a total $100 billion are coming up for grabs over the next two years, according to estimates from India’s National Association of Software and Service Companies.
But some firms, including Infosys’ competitors such as Bangalore-based Wipro and Hyderabad-based Satyam Computer Services, could see fiscal second-quarter margins squeezed as they fork out higher salary increases to stop staff straying to global firms such as IBM
TCS is due to report its quarterly results on Monday, with Wipro due on Oct. 18.