India’s second-largest software services firm, Infosys, attained the milestone of $100-billion market capitalization after its shares hit a record high during intraday trading on Tuesday. It is the fourth Indian company to achieve this feat – the other members of this club include Reliance Industries (market cap: $140 billion), Tata Consultancy Services ($115 billion), and HDFC Bank ($100.1 billion).
On Tuesday morning, Infosys shares reached a high of 1,755.60 rupees on the Bombay Stock Exchange, which pushed its market cap to 7.45 trillion rupees or $100 billion. The scrip has gained 40% this year and outperformed the Sensex growth (16.6%) by a wide margin.
Information technology shares have remained hot picks among the investors due to rising demand for digitalization and transformation to cloud computing, spurred mainly by the work- from-home concept amid the Covid-19 pandemic. Analysts believe that increased technology spending will continue for the medium to long term.
The Bangalore-based IT giant had reported 23% profit for the April-June quarter, the fastest Q1 growth in a decade, while its revenues rose 18%. The revenue from its digital business was 53.9% of the total.
Infosys’s total contract value from deal flows during the quarter was $2.6 billion. It added two new clients in the $100 million-plus category and 12 in the $10-million category. While announcing the results, the company revised its revenue guidance to 14-16% (from 12-14%) for the current financial year while maintaining its margin guidance at 22-24%.
Last week, rival Tata Consultancy Services has attained a market cap of over 13 trillion rupees after its scrip touched a 52-week intra-day high of 3,560.25 rupees on the Bombay Stock Exchange. It became the second Indian company to cross this mark so after Reliance Industries.
Portal glitch
However, Infosys’s execution of the Indian government’s new income-tax filing portal is drawing flak due to frequent glitches. It was launched two-and-half months ago. Taxpayers are facing many technical issues while filing their annual tax returns. Now there are even reports that the last date of income-tax filing, which is September 30, may get extended.
The issue drew sharp reactions on various social media platforms and the Finance Ministry had recently summoned Infosys Chief Executive Officer Salil Parekh to explain the reasons for the continued glitches. The government has set a deadline of September 15 for Infosys to resolve issues being faced by taxpayers.