The Hindu Business Line : Infosys positive on prices

Bangalore, July 11 Infosys said on Wednesday that the pricing environment continues to be favourable with an upward bias. The CEO, Mr S. Gopalakrishan, said the company managed to get a 2-3 per cent hike from its new customers during the quarter. The company added some 35 new clients during the quarter to take its overall client base to 509.

Further, the company revised its hiring plans upwards and expects to add 26,000 workers to its existing headcount of 75,971 employees. During the June quarter, it added 3,780 employees on a net basis while the gross addition stood at 7,000. Attrition rate for the quarter stood at 13.7 per cent.

Repeat orders

Repeat business accounted for 99.5 per cent of revenues. Attributing the high repeat business to the seasonal factors, Mr S. D. Shibulal, Chief Operating Officer, said the company signed three deals which were above $50 million, during the quarter.

Mr Shibulal said the company would continue to invest in Europe, which accounted for 26.8 per cent of the revenues. North America accounted for 62.6 per cent of the revenues while 1.8 per cent of revenues came from India and 8.8 per cent from rest of the world.

The European operations grew 8.4 per cent quarter-on-quarter, faster than the company average, Mr Gopalakrishnan said. In fact, revenues from Europe have grown from 9 per cent to 26.8 per cent in the past eight years.

The utilisation rates increased to 70.5 per cent from 67.9 percent from the previous quarter, while the onsite productivity was up 1.4 per cent and offshore one per cent.

Revenues

Infosys Australia reported revenue of Rs 144 crore and profits of Rs 23 crore. Mr Gopalakrishnan said the Australian subsidiary was seeing significant momentum particularly in the BFSI space.

Infosys BPO grew by 11.2 per cent quarter on quarter to report revenues of Rs 200 crore and profit of Rs 36 crore. “BPO continued to focus on the large outsourcing type of deals,” he said.

Infosys Consulting reported revenues of Rs 52 crore and has pared down the losses to around a million dollars from $10 million in the previous quarter. “Consulting is still in an investment mode and we expect it to break-even in the next three to four quarters,” Mr Balakrishnan said. Infosys China reported revenues of Rs 15 crore. “In the long term, we believe to have options outside India. Given that China has larger and deep talent pool, we need to invest in that country,” Mr Gopalakrishnan said.

Margin expectations

Infosys expects its net margins to move in a narrow band for the rest of the year, while the operating margins were likely to be impacted by 100-150 basis points, said the CFO, Mr V. Balakrishnan, addressing the analysts.

Commenting on the outlook for rupee, Mr Balakrishnan said he expects the rupee to be volatile and move in a narrow band in the short term. But in the long-term, the movement of rupee against dollar depended on the inflows.

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