The Hindu : Business : Infy quarter earnings up

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Thursday, Jul 12, 2007
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Business

Infy quarter earnings up

Special Correspondent

Company keen to expand business in the non-U.S. markets

Plans to add
26,000 employees
this year
Adds 35 new
clients including
Emirates Bank

— PHOTO: G. R. N. SOMASHEKAR

HEALTHY LIQUIDITY: S. Gopalakrishnan, CEO and Managing Director, Infosys Technologies, announcing the first quarter results at Infosys Campus at Electronic City near Bangalore on Wednesday.

BANGALORE: Infosys Technologies’ (Infy) first quarter revenues (consolidated) for 2007-08 grew by 25.1 per cent with a flat sequential growth, impacted by the weakening U.S. dollar and “other factors beyond our control”, according to CEO and Managing Director, S. Gopalakrishnan.

“We are growing our business in the non-U.S. markets. The euro region now contributes 26 per cent of total revenues as compared to nine per cent ten years ago. We have reduced the losses in our China operations and will increase our presence there as a long-term option,” he told reporters here on Wednesday.

Income for the quarter ending June 2007, was Rs. 3,773 crore, the net profit after tax was Rs. 1,079 crore, a growth of 34.5 per cent year-on-year, and earnings per share grew by 31.5 per cent to Rs. 18.89.

The net profit for the quarter included a reversal of tax provisions amounting to Rs. 51 crore; otherwise, earnings per share would have been lower, the company explained.

“Clients realise the strategic imperative of global sourcing in an increasingly flat business world and the demand for our services will continue to be strong,” Mr. Gopalakrishnan said. During the quarter, the company added 35 new clients, including Emirates Bank and a major retail chain in the U.K. and strengthened its relationship with Daimler Chrysler.

The headcount continued to grow with the company adding 7,004 (gross) employees during the quarter. The total staff strength now stands at 75,971, with persons of 65 nationalities.

While salaries in India continued to rise, the best IT engineers could be found only in India or China, Infosys has found.

The outlook for the second quarter will be income in the range of Rs. 3,952-3,993 crore with a year-on-year growth of 14.5-15.7 per cent and for the fiscal 2007-08, total income is expected to be in the range of Rs. 16,238-16,433 crore, the year-on-year growth being 16.9-18.3 per cent, Chief Operating Officer, S. D. Shibulal, said. This was based on the assumption that the U.S. dollar might remain at the Rs. 40.58 level in the months ahead. “The rupee has also appreciated against the British pound sterling and the euro. We maintain a healthy liquidity with cash or cash equivalents of $1.6 billion and are confident of our growth with plans to add 26,000 more employees this year,” he said.

New markets like West Africa were opening up for the company’s banking solution which has an Islamic banking version.

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