India’s Infosys raises revenue guidance, but third-quarter profit misses estimate

Technology

FILE PHOTO: The logo of Infosys is pictured inside the company’s headquarters in Bengaluru, India, April 13, 2017. REUTERS/Abhishek N. Chinnappa/File Photo

(Reuters) – Indian IT services company Infosys Ltd raised its full-year revenue growth forecast on Friday, but reported a larger-than-expected drop in third-quarter profit, due to higher expenses.

The country’s second-biggest software services exporter by market capitalization reported a 29.6 percent fall in attributable profit for October-December to 36.09 billion rupees ($511.94 million). That compared with the 41.31 billion rupees average of 25 analyst estimates compiled by Refinitiv Eikon.

A year earlier, it made a profit of 51.29 billion rupees, helped by tax benefits from the firm’s deal with the U.S. Internal Revenue Service, the company said in a statement here

Still, Infosys raised its revenue growth forecast for the year through March 2019 to 8.5-9 percent in constant currency, from 6-8 percent previously.

Total expenses in the quarter surged over 26 percent to 170.21 billion rupees, which included an additional depreciation and amortization charge of $12 million and a reduction of $65 million in the carrying value for its Skava units.

The company also said it was “no longer highly probable” that the sale of its units Kallidus & Skava and Panaya would be completed by March 31, 2019.

Meanwhile, revenue from operations in the quarter rose 20.3 percent to 214 billion rupees in what is usually considered a seasonally weak period for Indian IT firms.

Infosys also approved a buyback of shares worth 82.60 billion rupees as part of its capital allocation policy.

On Thursday, market leader Tata Consultancy Services Ltd reported a record quarterly profit for October-December.

Reporting by Arnab Paul and Krishna V Kurup in Bengaluru; Editing by Jason Neely and Mark Potter

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