Infosys’ stock rose more than 6% on Thursday, boosted by the Indian tech giant’s strong second-quarter results.
The digital services and consulting company reported revenue of $4.56 billion, a 13.9% increase on revenue of $4 billion in the prior year’s quarter. In constant currency terms, revenue grew 18.8% on the same period last year.
second-quarter revenue beat Susquehanna Financial Group’s estimate by $100 million and consensus by $50 million, according to Susquehanna analyst James Friedman. “INFY had a strong quarter, way better than feared and outperforming peers,” he wrote, in a note released on Thursday.
Digital revenues accounted for 61.8% of Infosys’ total revenue, representing year-over-year growth of 31.2% in constant currency. The company also announced a $1.13 billion share buyback.
Infosys earned 18 cents a share during the second quarter, compared with 17 cents a share in the same period last year.
“Our strong large deal wins and steady all-round growth in Q2 reflect the deep relevance and differentiation of our digital and cloud solutions for clients as they navigate their business transformation,” said Infosys CEO Salil Parekh, in a statement. Parekh acknowledged that concerns around economic outlook persist, but said that Infosys’ demand pipeline is strong.
Set against this backdrop, the company revised its fiscal year 2023 revenue guidance to growth of 15% to 16%. Infosys’ prior guidance was for revenue growth of 14% to 16%, according to Bloomberg.
Infosys’ second-quarter operating margin was 21.5%, a decline of 2.1% on the prior year’s quarter, but a sequential increase of 1.5%. The company revised its fiscal year 2023 operating margin guidance to 21% to 22%.
Shares of Infosys Ltd. rose 6.4% on Thursday, outpacing the S&P 500 Index’s
gain of 3%. The company’s stock has fallen 28.3% this year, compared with the S&P 500’s decline of 23%.
Of 46 analysts surveyed by FactSet, 32 have an overweight or buy rating, 12 have a hold rating and two have a sell rating.