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Mr Nandan Nilekani (right), CEO, President and MD, Infosys, and Mr T.V. Mohandas Pai, CFO, announcing the second quarter results of the company at a press conference in Bangalore on Tuesday. - G.R.N. Somashekar

Bangalore , Oct. 12

DRIVEN by a strong volume growth, software major Infosys Technologies Ltd, beating its own and street expectations, announced a 49 per cent jump in its net profits on Tuesday to Rs 447.37 crore for the quarter ending September against Rs 300.98 crore during the same period last year.

Revenues for the second quarter of the current fiscal jumped 52 per cent to Rs 1,749.33 crore over last year's Rs 1,151.8 crore.

Revenue and profit growth for this quarter was the highest since the first quarter of 2002. On a sequential basis, the revenues and profits grew 15 per cent each over the previous quarter.

Tracking the company's results, Infosys stock price closed higher at Rs 1,705.9 on the Bombay Stock Exchange as against the previous close of Rs 1,685.25.

Buoyed by the robust Q2 results and coupled with a strong demand momentum and offshoring interest, the company revised upwards its full year forecast for fiscal 2005. . Infosys expects income for FY05 to be in the range of Rs 7,132 crore and Rs 7,160 crore, a growth of 47-48 per cent over last year. The company expects earnings per share to be Rs 67 for FY05, a growth of 43 per cent.

For the third quarter, Infosys expects its income to be between Rs 1,869 crore and Rs 1,882 crore, a year-on-year growth of 49-50 per cent. EPS is expected to be at Rs 17.10, a year-on-year growth of 38 per cent. Infosys declared a mid-term dividend of Rs 5 per share (100 per cent on par value of Rs 5 each).

"Offshoring has become a mega trend in the industry," said Mr Nandan Nilekani, CEO, President and Managing Director . "We have seen our growth momentum continue. While the total volume growth during the quarter was 12.6 per cent, onsite growth was seven per cent and offshore growth was 15.3 per cent. I think this quarter has been successful in driving offshore growth at twice the onsite rate, which is part of our desire to build our offshore presence,'' Mr Nilekani said. Infosys' revenue mix tilted in favour of offshore as efforts gained momentum during the quarter.

Revenues from onsite came down to 49.8 per cent (51.9 per cent in Q1), while offshore accounted for 50.2 per cent. In terms of efforts, onsite engagements accounted for 31.5 per cent of the IT services efforts alone, the lowest number in the recent quarters, said Mr S. Gopalakrishnan, Deputy Managing Director. "We have been proactively shifting business to offshore," he added.

The Infosys Chief financial officer, Mr Mohandas Pai, said the growth rate would be down in the third quarter at 7.9 per cent, compared to a higher figure this quarter, as there were more holidays in the third quarter. The company added 32 new clients during the quarter taking its overall client base to 431. Repeat business accounted for 96.3 per cent of revenues as the company saw good demand from existing clients in banking and telecom sector, especially the service providers.

Asked about the possible impact of forthcoming US presidential elections on outsourcing, Mr Nilekani said the company would "wait and watch". "We believe that we are bringing a win-win situation for both America and India. We are increasing their productivity and making them more competitive. That creates jobs in the US," Mr Nilekani said.

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