Dallas, Texas 07/23/2015 (Financialstrend) – After years of disappointments on the earnings front, things are slowly looking up for India’s IT giant Infosys Ltd ADR (NYSE:INFY). The company might have struggled to generate substantial revenue gains since 2008, but not anymore seen by a 5% increase in net profit in the first quarter. The company’s long term prospects look brighter than ever having already raised its full year guidance.
Reduction in Staff Attrition
Since taking over as the company’s chief, Vishal Sikka has registered three straight quarters of gains that have seen the company outperform both the Sensex index and rival HCL. Sikka has slowly reduced staff attrition, which was a point of concern while spearheading efforts that have seen Infosys win some big clients having won six contracts worth more than $50 million in the recent past.
Infosys Ltd ADR (NYSE:INFY) point of focus is slowly shifting from IT outsourcing business to the more lucrative and fast-growing cloud computing and artificial intelligence business. The company believes it can generate up to $80,000 in revenues per employee from the current lows of 52,000 with the ongoing focus on cloud solutions.
The acquisition of Panaya for $200 million already looks promising and expected to play a big role in the company’s push for growth.
Multiple expansion into other areas of growth has so far allowed the share price to surge with actual earnings growth expected to play a key role in improving the company’s sentiments in the street. Infosys Ltd ADR (NYSE:INFY) expects its revenue for the current fiscal year to grow by between 7.2% and 9.2% in dollar terms against earlier estimates of between 6.25 and 8.2%.
During the quarter Infosys registered a 5% increase in orders representing the highest increase in more than five years while also adding new 79 new clients. Earnings may have remained flat in the quarter, but revenue growth remains a key talking point expected to bolster the stock’s sentiments on the Street.