Infosys net profit rises 21 percent, beats estimates; raises sales growth outlook

MYSORE, India (Reuters) - Infosys Ltd raised its sales growth outlook for the year after posting a higher-than-expected 21 percent rise in quarterly net profit as improving U.S. and European economies revived demand for outsourcing services.

India's second-largest software services exporter was also helped by a renewed focus on winning big-ticket contracts after a string of disappointing results led it to change a strategy of developing its own products.

"We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives," Chief Executive SD Shibulal said in a statement announcing fiscal third-quarter earnings.

Infosys raised it revenue growth outlook for the year ending March 2014 to 11.5 to 12 percent as expected, compared with it previous forecast of a 9-10 percent rise.

 

Investors has raised concerns about the company's prospects after several high-profile executives left in the last six months after the company's founder, N.R. Narayana Murthy, returned in June last year to lead the turnaround.

Infosys is a bellwether of India's export-driven $108 billion IT outsourcing industry. Worldwide IT spending growth is expected to accelerate to more than 5 percent in 2014 after dipping last year to its slowest pace of growth since the financial crisis, according the International Data Corporation.

Infosys, whose customers include Bank of America Corp and BT Group Plc , said net profit for the three months ended December 31 was 28.75 billion rupees, compared with 23.69 billion rupees a year earlier.

That compares with the average estimate of 27.15 billion rupees by 21 analysts, according to Thomson Reuters I/B/E/S.

(Reporting by Soham Chatterjee; Writing by Aradhana Aravindan; Editing by Miral Fahmy)