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Infosys bets on technology spend; flags currency risk

Infosys Technologies’ stronger-than-expected annual sales forecast suggests a gradual recovery for India’s IT services sector as global clients loosen their purse strings in an improving economy.

An appreciating local currency and salary hikes, however, could check profit growth for the country’s $60 billion sector, a magnet for tens of thousands of young job-seekers.

Infosys shares, valued at $35 billion, rose as much as 3.7 percent by 0900 GMT on Tuesday with more than 1.6 million shares traded, more than 15 times the daily average over the last 30 days.

“I think recovery is omni-present and they will get a bigger slice of recovery,” said R. Ravi, a sector analyst at Daiwa Capital Markets.

Kicking off results for the showpiece sector in which entry-level engineers are paid $550 per month on average, five times cheaper than their counterparts in developed countries, Infosys CEO S. Gopalakrishnan said the economic environment remains challenging.

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Desh Kapoor

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