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G.R.N. Somashekar

No signs of slowdown: Mr S. Gopalakrishnan (right), Chief Executive Officer, Infosys, and Mr S.D. Shibulal, Chief Operating Officer, at a press conference to announce the results in Bangalore on Thursday. —

Our Bureau

Bangalore Oct 11 Infosys Technologies Ltd outperformed its forecast and conformed to street estimates to clock quarterly revenues of a billion dollars for the second quarter-ended September 2007.

Infosys offset the impact of strong rupee through higher billing and utilisation to post a net profit of Rs 1,100 crore on revenues of Rs 4,106 crore, registering a year-on-year growth of 18.4 per cent and 19 per cent respectively. On a sequential basis, the net profits and revenues were up by two per cent and 8.8 per cent respectively.

Following a healthy topline growth, Infosys revised its full-year revenue guidance by 1.3 per cent and expects income to be in the range of Rs 16,558 crore-16,648 crore, a y-o-y growth of 19.4-19.8 per cent. The guidance is set at a rupee-dollar conversion of 39.50. Infosys increased dollar revenue guidance by three per cent to a y-o-y growth of 34.5-35 per cent.

The company revised its earnings per share (EPS) guidance by one per cent in rupee terms. EPS for FY08 is projected to be between Rs 78.60 and Rs 78.99, a y-o-y growth of 17.5 to 18.1 per cent.

For the December quarter, the IT major has guided to a revenue of Rs 4,238-4,258 crore, up sequentially 3.2-3.7 per cent and an EPS of Rs 20.11, up 4.4 per cent quarter-on-quarter.

Not satisfied with a revision in full-year EPS outlook, the market reacted sharply and the Infosys stock lost seven per cent to close at Rs 1,976 on the BSE on Thursday.

The company declared an interim dividend of Rs 6 per share (120 per cent on par value of Rs 5 per share).

“We have achieved yet another milestone by crossing $1 billion in revenues this quarter,” said, Mr S. Gopalakrishnan, CEO. “Pricing remained stable with an upward bias and we saw pricing go up by 1.9 per cent this quarter,” said Mr S.D. Shibulal, Chief Operating Officer. “We don’t see any slowdown in the marketplace at this point of time and demand continues to be robust,” he added.

“Our operating margins improved during the quarter despite the appreciating rupee,” said Mr V. Balakrishnan, Chief Financial Officer. Lower visa costs, coupled with scale benefits in general and administrative expenses and improved productivity helped Infosys to expand its operating margins by 250 basis points, despite the 50 basis points impact due to appreciating rupee.

Infosys increased its hedge position to $1.4 billion, up from $939 million in the June quarter. The effective tax rate was up at 15 per cent due to higher profitability onsite. It added 48 new clients to increase the overall client base to 520. Top 10 clients grew by 2.7 per cent, while non-top ten grew by 13.7 per cent.

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