The Hindu : Business : Infosys posts 33% rise in net at Rs. 1,641 cr.

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Infosys posts 33% rise in net at Rs. 1,641 cr.

V. Sridhar

Hopes to see a revenue growth of 21-25.5 per cent (year-on-year) in the last quarter of current fiscal

Benefits from rupee depreciation against dollar
Will not proactively approach Satyam clients

— PHOTO: G. R. N. SOMASHEKAR

BEATING EXPECTATIONS: (from left) S. D. Shibulal, COO, S. Gopalakrishnan, CEO and Managing Director, T. V. Mohandas Pai, Member of the Board, Head-HRD and Education and Research, and V. Balakrishnan, CFO, Infosys Technologies, at a press conference in Bangalore on Tuesday.

BANGALORE: Second largest software services exporting company Infosys Technologies beat market expectations by posting a 35.5- per cent year-on-year revenue growth in the third quarter of 2008-09.

Sequential growth of revenues, over the previous quarter, was 6.8 per cent. In the quarter ended December 31, the company earned Rs. 5,786 crore, while making a net profit of Rs. 1,641 crore. The net profit registered a year-on-year increase of 33.3 per cent. In dollar terms, revenues increased by a more modest eight per cent to $1.171 billion in the third quarter compared to same period in the previous year.

Announcing the results here on Tuesday, Infosys CEO and Managing Director S. Gopalakrishnan said, “This is a very good performance, considering the difficult times we are in.” He admitted that the depreciation of the rupee had benefited the company. This is highlighted by the fact that in dollar terms, year-on-year growth in the third quarter was only 8 per cent, compared to 35 per cent in rupee terms. In fact, revenues in the third quarter actually declined by 3.7 per, when compared to the previous quarter.

Mr. Gopalakrishnan admitted that the company’s ability to fix prices had been impaired. However, he said the “improved performance” on key parameters such as operating margins and utilisation of resources had provided “reiteration of the strength of Infosys’ model.”

Mr. Gopalakrishnan said the company’s earnings from non-U.S. markets had been affected by the depreciation of the British pound (by 18 percent), the Australian dollar (23 per cent) and the euro (11 per cent) against the U.S. dollar during the last quarter.

Referring to the recessionary situation, he said, “The next 12-18 months is going to be a challenging period. The velocity of business has definitely slowed down.” The company had laid more emphasis on fixed price model, paying attention to “customers’ expectations in this difficult situation,” he added.

Mohandass Pai, Director (Human Resources), said Infosys “would honour all offers of employment it has made.” The company plans to recruit about 27,000 employees next year. Its attrition rate was the lowest in eight quarters, he said.

Referring to the Satyam affair, Mr. Pai said, “Regulatory agencies need to act decisively in a coordinated manner.” He said the company would refrain from doing anything that would be construed as poaching on Satyam’s employees at a time when it was facing difficulties.

Infosys, he said, “would not proactively approach Satyam’s clients” for contracts. However, he said Infosys would not say ‘no’ Satyam’s clients approached the company.

Infosys hopes to see a revenue growth of 21-25.5 per cent (year-on-year) in the last quarter of the current fiscal. In dollar terms, it expects consolidated revenues to grow between -1.2 per cent and 2.5 per cent in the fourth quarter of the current financial year. In the full year, it expects revenues to grow by 29.1-30.3 per cent in rupee terms and by 11.8-12.8 per cent in dollar terms.

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