Mumbai: Shares in Infosys Technologies surged to a new all-time high on Thursday after strong sales forecast by India’s No. 2 software services exporter boosted the demand outlook for outsourcing services.
Analysts say Infosys’ stronger-than-expected sales forecast for the fiscal year to March 2011 suggests a gradual recovery for India’s $60 billion software services sector, though a stronger rupee and higher pay are worries.
At 11:30am, Infosys shares were trading up 1% at Rs2,810, after having risen as much as 1.5% to a record high of Rs2,823.80. The main Mumbai market was trading 0.3% higher.
The IT sector index rose as much as 1.5% to its highest since February 2007.
Shares in sector leader Tata Consultancy Services, which is expected to report a 38% rise in March quarter net profit on Monday, rose as much as 1.8% to Rs834.90.
Deutsche Bank said Infosys’ dollar revenue outlook for fiscal year 2010-11 was higher than the 12-15% range expected by the Street, and that the growth momentum for the company was expected to continue in the coming quarters.
Infosys, which counts Goldman Sachs, BT Group and BP among its customers, on Tuesday forecast revenue for fiscal 2011 to rise 16% to 18% in US dollars.
Tata Consultancy, Infosys and No. 3 Wipro have revived hiring and are competing for staff and orders with IBM, Accenture and Hewlett-Packard as demand for outsourcing picks up.
Infosys is well placed to beat its outlook for this year due to the strong recovery in demand in the second half of the year to March 2011, Deutsche Bank said in a note, maintaining its “buy” recommendation on the stock.