MUMBAI (Reuters) - Software services exporter Infosys Ltd met expectations on Friday with a 3.7 percent year-on-year increase in quarterly net profit as contract wins and foreign exchange gains boosted earnings, lifting its shares 10 percent in pre-open trade.
Consolidated net profit for the fiscal first quarter ended June 30 rose to 23.74 billion rupees from 22.89 billion rupees in the same year-ago period.
The profit compares with the 23.3 billion rupee average of 18 analyst estimates according to Thomson Reuters I/B/E/S for the company, whose customers include Bank of America, BT Group, Procter & Gamble Co and Volkswagen AG.
Infosys also maintained its forecast for 6-10 percent revenue growth for the current 2013/14 financial year.
Following are quick comments from analysts.
JAGANNADHAM THUNUGUNTLA, EQUITY HEAD, SMC GLOBAL SECURITIES, NEW DELHI
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"A number of factors seems to have worked in their favour including a weaker rupee, Murthy coming back at the helm and the U.S. economy looking up a bit. The stock was trading at a sharp discount to its peers on P/E multiples and this is the push the stock needed."
PHANI SEKHAR, FUND MANAGER, ANGEL BROKING, 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. We need to watch whether the management sees any air pockets going forward.
"You can ascribe it to Murthy magic. If they have deviated from their Infosys 3.0 strategy to focus on more mundane work at a lower price to bump up volume, that would be a good strategy and you can expect that kind of pragmatism from Murthy."
TARUN SISODIA, DIRECTOR, CHANAKYA NITI PVT LTD, MUMBAI
"This is far better than what some people in the market were expecting. 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.
"I think the stock should now go for re-rating."
SANDIP SABHARWAL, CEO, PORTFOLIO MANAGEMENT SERVICES, PRABHUDAS LILLADHER, MUMBAI
"It's a good start for earnings season. Infosys has beaten our lowered expectations. Guidance has been maintained and I think rupee guidance would be beaten as well.
"One shouldn't be too euphoric though for the stock as there are a lot of management and structural changes that need to happen." (Reporting by Sumeet Chatterjee and Abhishek Vishnoi; Editing by Ranjit Gangadharan)