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Infosys second quarter net profit up 30% at Rs. 1,432 crore

— PHOTO: G. R. N. SOMASHEKAR

Guarded optimism: S. Gopalakrishnan, CEO and Managing Director, Infosys (right), and V. Balakrishnan, CF0, at a press conference in Banglaore on Friday.

BANGALORE: Infosys Technologies on Friday announced that its revenues in the second quarter of 2008-09 touched Rs. 5,418 crore, growing 32 per cent year-on-year. In dollar terms, revenues increased by only 5.13 per cent, reflecting the sharp depreciation in the value of the rupee vis-a-vis the dollar during the quarter.

Sequential growth in the second quarter - that is increase over the preceding quarter — was 7.1 per cent in dollar terms and 12 per cent in rupee terms. The gross profits increased by almost 35 per cent during the quarter, when compared to the same period of the last year.

The net profit in the second quarter — at Rs. 1,432 crore — increased by 30.2 per cent over the same quarter of 2007.

The results reflected expectations that the U.S. financial meltdown has had an impact on the Indian IT sector. Guidance issued by the company for the next quarter ending in December 2008 projects growth in the range of 29.2- 34.2 per cent.

Revenue growth during the full financial year is likely to be in a band of 27.7-30.2 per cent (in rupee terms), which indicates that the company expects conditions to worsen in the next two quarters. The company has scaled down its earlier guidance for the full financial year – from between $4.97 billion and $5.05 billion to $4.72 billion and $4.81 billion. Infosys CEO and Managing Director S. Gopalakrishnan admitted the company had “revised its revenue guidance to reflect the current economic situation and the drastic depreciation of major global currencies against the dollar.” However, he said, the “challenging environment provides interesting opportunities” for the company.

During the July-September quarter the company added 40 new clients. Its efforts to widen its reach in Europe to limit its dependence on U.S. markets had a marginal impact. Its revenues from North America fell from 62.6 per cent of total revenues in the quarter ending June 2008 to 61.5 per cent in the quarter ending September 2008.

This share was almost fully made up by revenues from European markets.

The company’s efforts to diversify business away from the banking and financial services sector, which is in turmoil, appear to have met with some success.

The share of revenue from providing services to the manufacturing sector has increased significantly, by more than six percentage points, during this period.

V. Balakrishnan, Chief Financial Officer, said the company had “benefited from the depreciation of the rupee against the dollar during the last quarter.”

The average value of the dollar against the rupee during the last quarter was 44.50 compared to 42 in the preceding quarter and 40.19 a year earlier. The board has decided not to increase its offer price for the Axon Group.

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