Infosys surges 10% in pre-market trade as Q3 PAT beats estimates

MUMBAI: Shares of Infosys surged 10 per cent in pre-open market trade after the company surprised the street with net profit for the quarter ended December 2013.

The company reported a consolidated net profit of Rs 2,875 crore for quarter ended December 2013 against a net profit of Rs 2,407 crore in previous quarter. ET Now poll had expected net profit of Rs 2,685.2 crore.

The company has increased its FY14 dollar revenue guidance to 11.5-12 per cent against 9-10 per cent earlier.

In dollar terms, the net profit stood at $463 million.

Sales for third quarter were in line with expectations at Rs 13,026 crore against Rs 12,965 crore in previous quarter. In dollar terms, the company reported sales of $2.1 billion vs $2.06 billion, quarter-on-quarter.

According to Bhavin Shah, CEO, Equirus Securities, the environment is very good for the sector and that is visible from the Infosys numbers. A strong beat on the bottomline can be attributed to cost cuttings, he says.

Increase in guidance was inevitable as they maintained status-quo on the guidance in previous quarter. Shah expects the stock to react positively as EPS figures will go up post results.

Editda margins in Q3 increased to 25 per cent against 23.57 per cent in previous quarter.

"The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives,” said SD Shibulal, CEO and Managing Director. “We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share."