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April 15, 2016, 3:32 a.m. EDT

Infosys profit up 16%; sees strong revenue growth

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By Newley Purnell

SINGAPORE--Infosys Ltd. (500209.BY) on Friday forecast strong revenue growth for the year ahead after reporting a 16% increase in its fiscal fourth-quarter net profit, a sign the Indian outsourcer is dealing with challenges posed by new technologies such as cloud computing.

India's second-largest software exporter by sales said profit in the three months ended March 31 stood at 35.97 billion rupees ($540 million), compared with 30.97 billion rupees a year earlier. Revenue rose 23.4% to 165.5 billion rupees.

The Bangalore-based company, which is listed in New York and Mumbai, forecast an 11.8% to 13.8% increase in revenue in dollar terms for the fiscal year that began on April 1. Its revenue last year stood at $9.5 billion. Excluding currency fluctuations, the company expects revenue to grow 11.5% to 13.5% this fiscal year.

India tech-industry group Nasscom said in February it expects outsourcing revenue to increase 10% to 12% for the 2017 fiscal year.

"The momentum of large deal wins continued this quarter and bookings were strong," Chief Operating Officer U. B. Pravin Rao said in a statement.

The world "is being fundamentally reshaped by digital technologies," Chief Executive Vishal Sikka said in the statement, noting that Infosys is focusing on new services such as artificial intelligence.

Many Indian outsourcing firms have for years relied on a business model that used relatively cheap labor to run databases and write custom code. That model is now under threat given the rise of new technologies like cloud computing, in which servers and software are accessed via the Internet rather than on local networks or personal computers.

Infosys is an industry bellwether, and its results could signal similarly positive earnings for its peers. Tata Consultancy Services Ltd., the country's biggest software exporter by sales, reports its quarterly earnings on Monday. Wipro Ltd., another large outsourcer, releases its results Wednesday.

Markets in India are closed Friday for a public holiday.

Write to Newley Purnell at newley.purnell@wsj.com

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