The Hindu Business Line : Infy net keeps pace with topline growth

Mr Nandan Nilekani, CEO, Infosys, arriving at a press conference at the Infosys premises to announce the third-quarter results in Bangalore on Friday. - G.R.N. Somashekar

Bangalore , Jan. 9

THE net earnings of Infosys Technologies has kept pace with its topline growth for the third quarter of the current fiscal, signalling a stable price environment coupled with volume growth.

The company maintained its net operating margins sequentially at 26.6 per cent and indicated a greater traction from existing as well as new clients as offshoring gains momentum.

A better pricing would help the company shore up its operating margins going forward even as it attains economies of scale breaching the $1-billion revenue mark in the current fiscal. On the operating level, the company reported margins to the tune of 33.3 per cent, marginally up from 33.2 per cent a quarter back.

"Competition is there, but there is stability in price," the Managing Director, Mr Nandan Nilekani, said. ``The US GDP numbers are stunning and IT spending is rising.''

He added: "Economic slowdown is not such a issue in North America. Despite backlash against outsourcing, individual companies are under pricing pressure; they will continue to outsource but more discreetly."

The current sales cycles are "stable" and would not change drastically as these deals are important by their sheer size and strategic need, Mr Nilekani said.

The company said that 92 per cent of third-quarter revenue came from repeat business with onsite contributing 53.4 per cent, down from 54.1 per cent a quarter ago.

The share of offshore grew to 46.6 per cent from 45.9 per cent.

While fixed price projects accounted for 34.7 per cent of revenue, the rest came from time and material.

The top client contributed 5.5 per cent of the revenue. For the first time, Infosys reported two $50 million clients.