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Infosys net up 13 % at Rs.1,737 cr

Special Correspondent

The information technology industry faces three major challenges


First double-digit growth since 2008

To pay Rs.40 dividends


— PHOTO: G. R. N. SOMASHEKAR

CHALLENGES AHEAD:(from right) S. Gopalakrishnan, CEO, V Balakrishnan, CFO, and T. V. Mohandas Pai, Member of the Board and Head HRD, Infosys Technologies, at a press conference in Bangalore on Friday.

BANGALORE: Infosys Technologies on Friday reported consolidated revenues of Rs.6,947 crore in the second quarter ended September 30, an increase of 24.4 per cent over the previous year. The company made a net profit of Rs.1,737 crore in the second quarter, an increase of 13.2 per cent on an annualised basis. Earnings per share were higher by 13 per cent at Rs.30.41 compared to the previous year.

In dollar terms, revenues amounted to $1,496 million, an increase of 29.6 per cent. Its post-tax net income increased by 18 per cent, touching $374 million. Infosys and its subsidiaries added 27 new clients during the quarter.

Announcing the results, Infosys CEO and Managing Director S. Gopalakrishnan said, “This is the first quarter in about three years in which we have had double-digit growth for the first time since 2008. This is also the first quarter in which the sequential revenue increase has exceeded $100 million.”

Mr. Gopalakrishnan said Infosys expected revenues to be in the Rs.6,884-crore to Rs.6,953-crore range in the third quarter, implying an increase ranging from 19.9 per cent to 21.1 per cent on an annualised basis. During the full year, revenues are projected to be between Rs.26,951 crore and Rs.27,165 crore, an increase of between 18.5 per cent and 19.4 per cent. The underlying assumption for the forecast is that the average exchange rate for the dollar would be Rs. 44.50.

The challenges

However, Mr. Gopalakrishnan warned that the IT services industry faced “three major challenges.” He said that although globally the economic environment had improved during the last year, “growth in some markets like Europe remains muted. The second challenge, he said was posed by the extremely high volatility” in currency markets.

He pointed out that variations within a quarter were often as high as 10-15 per cent, which makes it difficult for exporters to make plans.

The “regulatory challenge” was a third issue for companies in the IT services apace, Mr. Gopalakrishnan said. He said high unemployment in the developed markets, which are also Infosys' markets, was resulting in “regulatory challenges.”

Infosys Chief Financial Officer V. Balakrishnan said the Reserve Bank of India “has to step in at some point of time because the current volatility in currency markets is unsustainable.”

The IT services major announced an interim dividend of Rs.10 per share and a “special” dividend of Rs. 30 per share on the occasion of its 30th year of operations. The total dividend payout would amount to Rs.2,400 crore, said S. D. Shibulal, Chief Operating officer.

T. V. Mohandas Pai, Member of the Board and Director-Human Resources, Education and Research and Administration, said the company was implementing its “largest promotion scheme.”

Promotions

“After promoting 8,000 employees in the first half of the year, we are extending this to 4,000 more employees,” he said. Mr. Balakrishnan said the higher wage costs had been factored into the financial guidance for the remaining part of the year. The company employed 1.22 lakh employees at the end of the last quarter.

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