The Hindu Business Line : ‘Infosys offshore biz continues to be healthy’

Bangalore, Oct. 11 Indicating that the environment for offshore business continues to remain healthy, Infosys said on Thursday that demand continues to be robust and there were no signs of any slowdown in the US, the largest IT market.

“We are in constant touch with our clients. At this point we are not seeing any major change in their behaviour. Next year budgets are yet to be frozen. We are watching the situation and continue to see a robust environment,” Mr S.D. Shibulal, Chief Operating Officer, Infosys, said.

“A clearer picture on the IT spends of US clients for 2008 is likely to emerge in the January-March quarter,” he added.

Infosys, Mr Shibulal said, has been signing new deals at 3-4 per cent above its average billing rates and renewing the existing ones at rates that are 2-3 per cent higher.

Further, the company is currently chasing a pipeline of 12-14 deals worth over a billion dollar. Commenting on the margin outlook, Mr V. Balakrishnan, Chief Financial Officer, said the operating margins for the current year may fall by 50-100 basis points. A strong rupee impacted Infosys’ margins by 50 basis points during the September quarter.

Due to an appreciating rupee, which has risen by more than 12 per cent this year, Infosys projected a loss of Rs 2,000 crore in revenues and Rs 250 crore in profits for the current financial year. “We have already lost about Rs 500 crore each in the first two quarters and are still able to maintain margins in a narrow band,” Mr Balakrishnan said.

The cash and cash equivalents stood at Rs 7,319 crore and the company incurred a capital expenditure of Rs 403 crore during the quarter.

Profit & loss

Revenues of Infosys BPO grew six per cent quarter-on-quarter during the September quarter. The company reported a revenue of Rs 212 crore and a net profit of Rs 40 crore.

Infosys Australia reported a net profit of Rs 30 crore on revenues of Rs 138 crore.

The consulting subsidiary, Infosys Consulting Inc, continued to make losses and reported a net loss of Rs 48 crore on revenues of Rs 65 crore.

Infosys China reported a loss of Rs 13 lakh on revenues of Rs 20 crore. The recently opened Mexican subsidiary, Infosys Technologies S.De.R.L.De C.V. Mexico, posted a loss of Rs 40 lakh.

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