The better-than-expected performance has come on the back of the weakness in the Indian rupee. Excluding the impact of exchange rate fluctuations, the company continues to struggle with growth in its key markets: North America and Europe.
Moreover, the strengthening rupee and the company's failure to rein in its retention rate can put a serious dent in its turnaround efforts, even as the industry grows.
For these reasons, the company's stock is down 9.3% this year, currently around $51, and may continue to struggle in the future.
In the previous quarter, the company's revenue climbed 8% year over year to $2.09 billion while its net profit increased by 9.7% to $487 million, or 85 cents a share. This was due to higher volume, client additions and improvements in big data and cloud services. The weakness in the rupee has also given a boost to the earnings of Infosys and other players in this industry such as Tata Consultancy Services and Wipro (WIT).
Infosys's revenues were in line with analysts' estimates, while earnings were better than analysts' estimates.
In the previous quarter, Infosys added 50 new clients, mainly in financial services, manufacturing, telecommunication and energy utilities segments. The number of its lucrative "million-dollar clients" has gone up by 15% from last year to 501.
Infosys has also won several large outsourcing contracts from government agencies as well as from companies operating in the communication, energy, financial services and health care industries.
The business has reported growth in the advanced technology solution as it has signed 47 new deals for its big data and cloud offerings, mobility offering and for engineering services.
One of its major wins has been a multiyear contract from Volvo to provide applications that would support multiple operations ranging from product development to customer services. Besides this, the company has also signed an outsourcing contract with an unidentified "large European bank," to manage its applications portfolio.