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21 percent rise in Infosys Q1 profit
By siliconindia
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Monday, 14 July 2008, 17:52 IST
Bangalore: Riding on a weaker rupee factor, India's Infosys Technologies has beaten expectations with a 21 percent rise in its quarterly profit. With the results, the company raised its full year guidance on hopes for a revival in outsourcing demand. The company forecasts its revenue to be rising 27.5 to 29.5 percent in rupee terms in the year 2008/09.
"Although the global economic environment continues to remain unstable and could impact IT spending in the short term, we see several opportunities for growth as customers focus on improving efficiency," CEO and Managing Director S. Gopalakrishnan said.
Infosys, which develops applications, designs supply chains and offers back-office services, said on Friday net profit rose to 13.02 billion rupees ($303 million) in the first quarter ended June from 10.79 billion rupees reported a year earlier.
A Reuters poll of 15 brokerages had estimated a net profit of 12.69 billion rupees for Infosys, which counts ABN AMRO, Goldman Sachs, Philips Electronics, and U.S. insurer Conseco among its more than 500 clients. The company and its subsidiaries added 49 new clients during the quarter. And the number of the gross addition of employees was 7182, the net being 3192.
Pricing had remained stable in the June quarter, Infosys said, but margins were impacted by wage increases and visa costs. The currency market was expected to remain volatile in the short term, it said.
Nasdaq-listed Infosys is the first to report quarterly earnings among Indian IT companies, which had annual revenues of around $52 billion in 2007/08.
A large pool of English-speaking graduates and comparatively cheaper wages had helped Indian firms ride an outsourcing boom for years, but the growth slowed last year when Wall Street banks made huge write-downs related to the subprime crisis and as the U.S. economy lurched towards recession. Although Indian outsourcing firms are expanding to Europe, Asia and the Middle East to lower their dependence on the United States, the country still accounts for half of their sales. Shares in Infosys, which is valued by the market at $23 billion, had risen 21 percent in the June quarter, outperforming a gain of 13 percent in the sector index and a 14 percent drop in the main Mumbai index .
