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News >> Technology >>
Infosys first quarter dissappoints
By agencies
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Tuesday, 12 July 2005, 19:30 IST
BANGALORE: Infosys Technologies has reported the first quarter net profit of $122 million on revenues of $476 million, up 42.09 percent from the corresponding quarter last fiscal.
Infosys chief executive officer Nandan Nilekani had however warned in April that first quarter earnings would be flat "mainly due to customers being preoccupied with compliance with various U.S. laws such as anti-money laundering, and organizational changes happening with large customers."
"Growth is expected to pick up from the second quarter onwards," he added. However the result failed to impress investors.
On the Mumbai stock exchange, Infosys shares were down 4.64 percent to 
2,207.90 while the benchmark 30-share Sensex index was down 55.18 points or 0.76 percent to 7,251.56.
Nilekani informed that salary increases of 15 percent for employees working abroad and three percent for those in India had an impact on the first quarter profit.
As well, the company said earnings were reduced because of sharp exchange rate fluctuations in the euro, dollar and pound in the first quarter.
T.V. Mohandas Pai, chief financial officer, said all the factors combined had an impact of about $33.3 million on the company's first quarter earnings.
Despite the result, the company said it added 36 new clients in the first quarter and 3,056 employees joined the firm based in Bangalore, taking the total workforce 39,806.
S. Gopalakrishnan, chief operating officer, said Infosys planned to hire an additional 13,500 employees during the next nine months.
"Of this 7,000 people will be recruited in the second quarter itself," he said.
The company expects revenue to rise about 26 percent to 89.4-90.5 billion rupees for the current financial year to March 2006.
"Our strategy has been to pursue high-quality prospects among Global 500 companies that will give us large growing revenue streams for many years," said Basab Pradhan, the head of worldwide sales.
"This quarter we started relationships with nine Global 500 companies in diverse industries like pharmaceuticals, supermarkets, equipment manufacturing, automotive, utilities and insurance and banking in the U.S. and Europe," he said.
The U.S. accounted for 64 percent of total revenues while Europe followed with 24 percent.
2,207.90 while the benchmark 30-share Sensex index was down 55.18 points or 0.76 percent to 7,251.56.
Nilekani informed that salary increases of 15 percent for employees working abroad and three percent for those in India had an impact on the first quarter profit.
As well, the company said earnings were reduced because of sharp exchange rate fluctuations in the euro, dollar and pound in the first quarter.
T.V. Mohandas Pai, chief financial officer, said all the factors combined had an impact of about $33.3 million on the company's first quarter earnings.
Despite the result, the company said it added 36 new clients in the first quarter and 3,056 employees joined the firm based in Bangalore, taking the total workforce 39,806.
S. Gopalakrishnan, chief operating officer, said Infosys planned to hire an additional 13,500 employees during the next nine months.
"Of this 7,000 people will be recruited in the second quarter itself," he said.
The company expects revenue to rise about 26 percent to 89.4-90.5 billion rupees for the current financial year to March 2006.
"Our strategy has been to pursue high-quality prospects among Global 500 companies that will give us large growing revenue streams for many years," said Basab Pradhan, the head of worldwide sales.
"This quarter we started relationships with nine Global 500 companies in diverse industries like pharmaceuticals, supermarkets, equipment manufacturing, automotive, utilities and insurance and banking in the U.S. and Europe," he said.
The U.S. accounted for 64 percent of total revenues while Europe followed with 24 percent.