Infosys shares surge as firm maintains revenue forecast

Infosys co-founder Narayana Murthy Investors are betting that Narayana Murthy will help to revive the firm's fortunes

Related Stories

Shares of Infosys, India's second-largest software firm, have surged by as much as 12% after it reported a jump in profits and left its yearly revenue growth outlook unchanged.

It made a net profit of 23.8bn rupees ($397m; £262m) in the April to June quarter, a 3.7% jump from a year ago.

Infosys has struggled in recent months to maintain its growth rate amid a slowdown in key markets such as the US.

Last month, it asked its co-founder Narayana Murthy to return as chairman.

"This is far better than what some people in the market were expecting," said Tarun Sisodia a director at Chanakya Niti Pvt Limited in Mumbai.

"The earnings have been pretty volatile in the last few quarters and this time around the expectations were muted given what has happened in the company recently."

The company maintained its forecast of 6-10% revenue growth in the current financial year.

Murthy magic?

Start Quote

Generally you can conclude that the worst is over for them but it remains to be seen how quickly they can recover from here”

End Quote Phani Sekhar Angel Broking

India's software firms, including Infosys, have seen their growth rates slow in recent years.

They have been hurt by an economic slowdown in key markets such as the US and Europe, which has affected demand.

Earlier this year, Infosys had warned that its profit margins may remain under pressure amid the challenging global economic environment, triggering concerns about the firm's health.

Prompted by the slowdown, the company asked its co-founder, the 66-year old Mr Murthy, to return to the helm.

Mr Murthy, who had retired two years ago, took charge of the firm on 1 June for a period of five years.

Analysts said that investors were betting that his return would help the firm achieve higher growth rates than it has seen in recent months.

"You can ascribe it to Murthy magic," said Phani Sekhar, a fund manager with Angel Broking in Mumbai.

"Generally you can conclude that the worst is over for them but it remains to be seen how quickly they can recover from here."

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa


  • Woman in swimming pool Green stuff

    The element that makes a familiar smell when mixed with urine


  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health


  • The OfficeIn pictures

    Fifty landmark shows from 50 years of BBC Two


From BBC Capital

Programmes

  • Tuna and avacadoThe Travel Show Watch

    Is Tokyo set to become the world's gourmet capital?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.