The Hindu : Business : Infosys fourth quarter profit up 66 p.c.

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Friday, Apr 15, 2005

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Business

Infosys fourth quarter profit up 66 p.c.

Special Correspondent

More than 12,000 people to be hired by group companies in the current year

Infosys is expected to invest Rs. 950-1,100 crores mainly in technology infrastructure, expansion of seat capacity and China operations.

TOWARDS GREATER GROWTH: The Chief Executive Officer of Infosys Technologies, Nandan Nilekani (centre), with the Chief Operating Officer, Kris Gopalakrishna (left), and the Managing Director of Progeon (a subsidiary of Infosys), Akshay Bhargav (right), before addressing a press conference in Bangalore on Thursday. — Photo: G. R. N. Somashekar

BANGALORE: Riding on the outsourcing boom, software major Infosys Technologies on Thursday reported a net profit of Rs. 1,891.67 crores for the year ended March 31, 2005, a leap of 52.11 per cent over Rs. 1,243.63 crores posted in the previous year.

The Nasdaq listed company posted full year revenues of Rs 7,129.65 crore, an increase of 46.91 per cent over Rs. 4,852.95 crores earned in 2003-04, an Infosys statement said here. The net profit for 2004-05 includes Rs. 45.19 crores from sale of stake in the U.S.-based Yantra Corporation.

130 per cent final dividend

The company posted a net profit of Rs. 558.64 crores, a jump of 66.64 per cent in the fourth quarter over Rs. 335.23 crores in the same period last year. Revenues jumped by 47.27 per cent to Rs. 1,987.32 crores from Rs. 1,349.25 crores. A final dividend of Rs. 6.50 per share of Rs. 5 each (130 per cent) has been recommended.

The company has forecast a revenue growth of 24.7 to 26.6 per cent in rupee terms (Rs. 8,890 crores to Rs. 9,029 crores) and 28 to 30 per cent in dollar terms ($2,038 million to $2,070 million) for the current fiscal, enabling the company to cross the $2-billion mark by March, 2006, a short two years after it had touched the $1 billion milestone in March 2004.

However, the revenue growth for the first quarter of the current year is expected to be flat at 0.7 to 1.6 per cent.

This is because customers in the financial services sector, which contribute for about 40 per cent of the company's revenues, are pre-occupied with various regulatory and compliance issues related to the Sarbanes-Oxley Act, the Anti-Money Laundering Act and the Patriots Act in the U.S.

"This general pre-occupation with compliance is slowing down mega projects that we can take up,'' says the Infosys Managing Director and CEO, Nandan M. Nilekani.

Any impact of this pre-occupation with compliance issues was purely temporary and short term and would impact mainly the first quarter, he added. "We expect the growth to pick up in the remaining three quarters and are confident about our outlook for the year,'' S. Gopalakrishnan, COO, Infosys, noted.

During 2005-06, Infosys was expected to invest Rs. 950 crores-Rs. 1,100 crores mainly in technology infrastructure, expansion of seat capacity to 20,000 besides expanding China operations, its Chief Financial Officer, T. V. Mohandas Pai, said.

Mr. Gopalakrishnan said Infosys was discussing the proposed ADR offering with its bankers. Infosys planned to hire 12,600 people across the group companies during the current year. Out of the 12,600, the company had already sent offers to about 6,000 people in various engineering colleges, Mr. Gopalakrishnan said.

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