The Hindu Business Line : Infosys sets 3:1 bonus; fires market<br>

INFOSYS Technologies, buoyed by topping $1 billion sales, announced three bonus shares for every share held and a special dividend of Rs 100 per share. The unexpected sops coupled with a guidance that was in line with market expectation, lifted the technology sector as a whole.

Infosys said its net profit for the financial year 2003-04 was Rs 1,243.63 crore, up 30.25 per cent from a year ago. The company reported total income of Rs 4,852.95 crore, 33.32 per cent higher from a year ago.

Infosys said its net profit for the fourth quarter ended March 31, 2004 was Rs 335.23 crore, up 29.06 per cent year-on-year, while the total income surged 31.06 per cent to Rs 1,349.45 crore from a year ago.

"We are the fastest company in software sector to reach $1-billion mark. This team has run the marathon," the Chairman and Chief Mentor, Mr N.R. Narayana Murthy, said.

The company forecast its net profit for the financial year 2004-05 would grow by 20 per cent as earnings per share is expected to be Rs 224. Infosys is likely to grow its income by 24 per cent in the current fiscal and that would be in the range of Rs 5,994 crore to Rs 6,041 crore.

Such guidance was mostly in line with market expectation, and Infosys stocks zoomed 16.7 per cent to Rs 6,000 following its bonus ratio announcement and closed 6.8 per cent high at Rs 5,490.20 — a two-month high closing price. The special dividend of Rs 100 was over a final dividend of Rs 15 for the last financial year. The special and final dividend payout would be Rs 766.17 crore, which will be funded partly out of its reserves, company officials said.

Meanwhile, the Chief Executive Officer, Mr Nandan Nilekani, said, the difference in topline and bottomline growth was due to the investments made in its new consulting subsidiary, Chinese arm and upgrading its banking product. Such investments have dented the bottomline by $10 million, he added.

However, Mr Nilekani expects the price to be steady in the current financial year. Despite a strong rupee, the company will be able to maintain margins through benefits of close to two per cent drop in selling and general administration costs, he added.

Infosys, which added 38 new clients in the fourth quarter, currently services 393 clients The top client contributed 6.5 per cent to Infosys' revenue in the fourth quarter of last fiscal. The company said that 55.1 per cent of its fourth quarter revenue came from onsite engagements.

"Our initiatives to enhance efficiency, to increase offshore effort, and also to create systems and processes to support rapid growth have been successful," said Mr S.D. Shibulal, Head-Global Customer Delivery.

Utilisation excluding trainees for the last quarter was 78.9 per cent while that including the trainees was 70.4 per cent.

Offshore rate per person-per month for March quarter was $4,502 while that of onsite was $10,804.

Infosys added 2,425 employees on a net basis in its March quarter and 9,758 in the entire last fiscal. The current employee strength was 25,634.

The company also recommended a stock dividend on its American Depository Shares (ADS) in the ratio of two for one. Following the stock dividend on ADS, the ratio for converting ADS into local equity shares will be fixed at one ADS per share.

Cash and cash equivalents, including investments in liquid mutual funds, increased to Rs 2,769 crore during the March quarter.

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