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Infosys Ltd ADR (INFY): Strong Top-Line Growth From This Indian Tech Consultancy

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Infosys Ltd ADR (NYSE:INFY)India is well known for its prowess in tech consulting and outsourcing, an industry that has led to the rapid growth and development of cities like Bangalore. With a young and often well-educated workforce, India has carved out a niche for itself in the global economy in which it is very competitive. One of the biggest Indian tech consultancies recently reported strong earnings, displaying the company’s ability to maintain impressive revenue growth.

Introducing Infosys Ltd ADR (NYSE:INFY)

Infosys Ltd ADR (NYSE:INFY), with a market cap of $23.5 billion, is one of India’s leading tech companies. Based in Bangalore, the firm employs over 150,000 people. The company offers a range of business and IT support services, including systems integration, enterprise solutions, application development and infrastructure management. The stock is up some 17% over the last twelve months, following its most recent report. It has a beta of 1.16 and yields 1.68%.

Strong Revenue Growth

Looking at the company’s earnings history, we can see a pattern of slow but steady earnings growth over the years. The company doubled its annual EPS between 2007 and 2012, going from $1.45 to $3.00 per share. Moreover, the company hasn’t missed a quarterly report in years, and its revenue growth was larger than the industry average in 2011 and 2012.

The top-line growth was perhaps the most impressive part of the most recent earnings report, that of Q1 2013. EPS in dollar terms of $0.73 beat the consensus estimate of $0.70, with net income profit rising only 0.5% year-over-year. In rupees, though, net income was up 3.7% and revenue a sizable 17.2% year-over-year, easily beating estimates.

This performance was driven in no small part by strength in Cloud Computing and Big Data, an area in which the company sees plenty of room for growth. In the last quarter, the company acquired 15 new engagements in this division. Management is cautiously optimistic about the rest of the year, expecting revenue to grow between 13% and 17% in rupee terms.

Competitors

Accenture Plc (NYSE:ACN), a large competitor hailing from the UK, recently delivered earnings that missed the analyst consensus, indicating that the company may not be faring as well as Infosys Ltd ADR (NYSE:INFY) in a tough IT spending environment. Revenue came in at $7.20 billion, quite substantially missing the $7.42 billion consensus. Earnings weren’t much better. EPS for the quarter came in at $1.06, under the $1.13 estimate.

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