The Hindu Business Line : Infosys rides on growth in European operations

Good numbers: Mr S. Gopalakrishnan, CEO and MD, Infosys Technologies Ltd, flanked by Mr V. Balakrishnan, CFO (left), and Mr S.D. Shibulal, COO, at a press conference at the Electronic city near Bangalore on Tuesday. —

Our Bureau

Bangalore, April 15 Infosys Technologies Ltd defied expectations that the US slowdown would pull down earnings and it reported a net profit growth of 9.2 per cent in the fourth quarter ending March 2008.

The company attributes this partially to strong growth in income from Europe. It forecasts a revenue growth of between 19.2 per cent and 21.1 per cent in fiscal 2009.

Infosys said net profit for the March quarter was Rs 1,249 crore, compared with Rs 1,144 crore a year-ago. Income for the quarter increased 20.4 per cent to Rs 4,542 crore (Rs 3,772 crore). Net profit for the quarter included a reversal of tax provisions of Rs 20 crore.

For fiscal 2009, the company said it expects earnings in the range of Rs 92.32 to Rs 93.92 per share, on a revenue target of between Rs 19,894 crore and Rs 20,214 crore.

Mr Harit Shah, an analyst with Angel Broking, said the forecast looks achievable and the fact that the company has not factored in big deals and increase in pricing would help.

But the company has assumed the rupee to trade at Rs 40 a dollar. So if the rupee appreciates or the recession in the US persists, the target would become risky, he added.

The company also announced a final dividend of Rs 7.25 a share and a special dividend of Rs 20 a share for fiscal 2008.

The company said in the latest quarter, benefits of its core business strategy of reducing dependence on North America and focussing on fixed price projects and offshore delivery effort have been evident. In the fourth quarter, revenue from Europe touched 29.3 per cent of total revenue, compared with 26.6 per cent in the corresponding quarter last year, the company said.

Mr S.D. Shibulal, Chief Operating Officer, said the company’s onsite effort has come down by about 1 per cent, compared with the third quarter. He said the company would do more work outside India. Revenue from fixed price projects increased to 33.2 per cent in the latest quarter, up from 25.9 per cent in the year-ago quarter, the company said in a statement.

New clients

Infosys has added 40 new clients and bagged four major deals this quarter. Mr Amitabh Chaudhry, Chief Executive and Managing Director, Infosys BPO Ltd, said foreign exchange fluctuations had a minimal effect this quarter.

Mr T.V. Mohandas Pai, Member of Board, said fiscal 2008 saw a wage hike of 11 to 13 per cent, compared with 12 to 15 per cent last year.

For fiscal 2008, the company reported earnings of Rs 4,659 crore on revenue of Rs 16,692 crore. Net profit for the period included a reversal of tax provisions of Rs 121 crore.

Mr S. Gopalakrishnan, Chief Executive and Managing Director, said in the future, there could be short-term challenges due to global economic uncertainties, but the company sees significant growth opportunities in the medium to long-term.

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