The Hindu Business Line : Infosys Q4 net rises 70% on new clients, higher fees

DIFFERENT RESPONSIBILITY: Mr Nandan Nilekani, CEO and Managing Director, Infosys, addressing a press conference at the Electronic city near Bangalore on Friday. — G.R.N. Somashekar

Bangalore April 13 A strong ramp up by top 10 clients coupled with a Rs 124-crore tax write back helped Infosys Technologies post profit growth of 70 per cent for the quarter-ended March 31, 2007.

But, Infosys forecast muted earnings growth for 2007-08, when its revenues would cross $4-billion mark and profits exceed a billion dollars.

Consolidated post-tax earnings for March quarter stood at Rs 1,144 crore on revenues of Rs 3,772 crore as against a net of Rs 983 crore on revenues of Rs 3,655 crore in December quarter. Though the Q4 net profits and revenues fell short of projections, the tax write back and higher other income boosted the overall performance.

Net profit

For financial year 2006-07, Infosys posted a 56 per cent growth in net profits, while revenues grew 46 per cent over last year. Net profit for FY07 stood at Rs 3,856 crore on revenues of Rs 13,983 crore, as compared to a net of Rs 2,458 crore on revenues of Rs 9,521 crore in FY06.

For FY08, Infosys expects a year-on-year revenue growth in range of 22.6 per cent to 24.6 per cent at between Rs 17,038 crore and Rs 17,308 crore, and an EPS growth of 20-22 per cent, which fell marginally short of market expectations. In dollar-terms, the revenue growth would be higher at 28-30 per cent, while the profit growth would be in the range of 26-28 per cent.

Trailing the results and guidance, the Infosys stock opened high and edged up to an intra-day high of Rs 2,121, before closing at Rs 2,087.60, a gain of 2.15 per cent. Infosys declared a final dividend of Rs 6.50 per share (130 per cent on par value of Rs 5). Including an interim dividend of Rs 5 per share, the total dividend stands at Rs 11.5 per share involving an outgo of Rs 649 crore.

`Strong growth'

"Our revenues grew by around $1 billion this year," said Mr Nandan Nilekani, CEO and Managing Director. "The global IT services industry continues to show strong growth with exciting opportunities and we don't see any signs of slow down. We are well positioned to take advantage of this," he said.

Infosys added 34 new clients increasing its active client base to 500. The top 10 clients grew by 15.5 per cent in Q4, much ahead of the revenue growth. The company added 30,946 employees on a gross basis (net addition 19,526) to increase overall employee base to 72,241. For FY08, Infosys expects to add 24,500 employees on a gross basis.