The Hindu : Business : Infosys first quarter net up 49 p.c.

Online edition of India's National Newspaper
Thursday, Jul 13, 2006

Business

Business

Infosys first quarter net up 49 p.c.

Special Correspondent

Brisk outsourcing from West and rupee depreciation help boost profit

BANGALORE: Infosys Technologies Limited got off to a flying start in 2006-07 as brisk outsourcing from western countries jacked up its net profit by 49.2 per cent to Rs. 794 crore in the first quarter (April-June 2006) from Rs. 532 crore in the same period a year ago.

The company earned Rs. 3,015 crore during the first quarter, a growth of 45.6 per cent, against Rs. 2,071 crore as it won 38 new clients and fresh orders on the strength of continued boom in global outsourcing. The company's initial forecast for the first quarter had pegged revenues in the range of Rs. 2,793 crore and Rs 2,816 crore with a year-on-year growth of 34.8 per cent and 35.9 per cent.

On a sequential basis, Infosys clocked a growth in net profit of 18.8 per cent during the first quarter this year over the fourth quarter of the last fiscal when it posted a net profit of Rs. 673 crore. The NASDAQ-listed company's revenues grew by 14.9 per cent during the latest quarter over the January-March quarter of the previous fiscal when it earned Rs. 2,624 crore.

The flying start in the first quarter, normally considered a weak quarter, has raised glimpses of another bountiful year for the company. Taking note of the strong growth, Infosys has revised its revenue forecast for the second quarter (July-September) as well as for the full year, an exercise that is generally done at the end of the second quarter.

Infosys now expects revenues in the range of Rs. 3,257 crore and Rs. 3,280 crore during the second quarter, a growth of 42 per cent to 43 per cent over the corresponding quarter of the last fiscal. For the full year, it expects to earn between Rs. 13,350 crore and Rs. 13,400 crore with a year-on-year growth of 40.2 per cent and 40.7 per cent. Infosys had earlier forecast its full year revenues to be in the range of Rs. 12,254 crore and Rs. 12,446 crore with an annual growth rate of 28.7 per cent and 30.7 per cent.

The company's revenues grew by 33.5 per cent to Rs. 9,521 crore in 2005-06.

"Business performance was going to be much more robust than what we had anticipated in April. Besides, the depreciation of the rupee against all major currencies also added to the growth,'' said Nandan M. Nilekani, CEO, President and Managing Director, while justifying the decision to revise the revenue forecasts after the first quarter. The rupee depreciation alone contributed a 2.2 per cent improvement in margins during the first quarter. Mr. Nilekani said Infosys had factored in the wage increases for the year while revising the revenue outlook. While off-shore salaries had been raised by 14-15 per cent, on-site wages had been hiked by three per cent. "We have maintained our margins despite increases in salaries and visa costs,'' said V. Balakrishnan, Chief Financial Officer, Infosys.

Infosys hired 8,097 persons during Q1 and said that it was well on target to recruit 25,000 employees during the year.

Printer friendly page
Send this article to Friends by E-Mail

Business