India’s second-biggest IT services exporter Infosys Ltd posted third-quarter profit well above estimates, helped by tax benefits from the firm’s deal with the US Internal Revenue Service (IRS). The company had signed an Advance Pricing Agreement with the US IRS this week, resulting in an effective tax rate of about 100 basis points lower going forward.
The conclusion of the agreement had a positive impact on consolidated basic earnings per share in the quarter by about 6.29 rupees. The company’s basic earnings for the quarter was 22.55 rupees per share, it said. Profit rose 38.3 percent to 51.29 billion rupees ($806 million) in the three months ended Dec 31, Infosys said on Friday. That compared with analysts’ average estimate of 37.10 billion rupees, according to Thomson Reuters data.
Revenue from operations rose 3 percent to 177.9 billion rupees from a year earlier, with revenue from the financial services segment down 0.4 percent at 46.43 billion rupees, the company said. Infosys also maintained its expectation for full-year revenue growth of between 5.5 and 6.5 percent.
This is the first result announcement since Salil Parekh took over as CEO this month. His predecessor Vishal Sikka quit late last year after a long-drawn public fued with Infosys’ founders.