MUNICH (dpa-AFX) - IT services provider Nagarro is likely to be less profitable in the new year amid strong sales growth. Sales of 1.02 billion euros are expected for 2023, the company announced in Munich on Monday. That would be a fifth more than management anticipated for last year. The gross margin is expected to remain unchanged at 28 percent. However, only 15 percent of total revenue is expected to remain before interest, taxes, depreciation and amortization (Ebitda) and adjusted for special items, which is one percentage point less than targeted for 2022. Investors in the SDax-listed company were initially unsettled in response to the news on Monday afternoon, but the share ultimately closed higher.

While the stock was up before the forecast was announced, it slipped briefly into negative territory afterwards. However, it quickly recovered its losses and ended the day up around 1 percent at 118.40 euros. However, it did not come close to the day's high of 120 euros. Jefferies analyst Martin Comtesse sees the outlook given by Nagarro's management as confirming his optimistic stance, despite the economic headwinds./lew/bek/he