1:1 bonus, Rs 30 a share special Silver Jubilee dividend announced

Our Bureau

Bangalore, April 14

Infosys Technologies Ltd has crossed $2 billion in revenue in its 25th year and rewarded its shareholders with a 1:1 bonus and a special Silver Jubilee dividend of Rs 30 a share (600 per cent on par value of Rs 5 each).

The company has also declared a final dividend of Rs 8.5 a share, which takes the total payout including the interim dividend and special dividend to Rs 45 per share for 2005-06 amounting to Rs 1,238 crore.

Net profit for the year was up 30 per cent at Rs 2,458 crore on revenues of Rs 9,521 crore, which grew by 33.5 per cent over the previous year.

For the quarter ended March 2006, net profit was up 20.6 per cent at Rs 673 crore on revenues of Rs 2,624 crore, which grew by 32 per cent. Sequentially, net profit and revenues were up by 3.7 per cent and 3.6 per cent respectively, which analysts felt were below expectations.

Contrary to the expected conservative stance, the Infosys management came out with an aggressive guidance for the current fiscal, which analysts said was ahead of street expectations and could lead to re-rating of the software sector.

Revenue expectations

For 2006-07, Infosys expects revenues to be in the range of Rs 12,254-12,446 crore, achieving year-on-year growth of 28.7-30.7 per cent. Earnings per share (EPS) are expected to be Rs 113.85-115.61, a growth of 26.4- 28.4 per cent.

Income for the first quarter is expected to be in the range of Rs 2,793- 2,816 crore, showing growth of 34.8-35.9 per cent. EPS is expected to be Rs 24.76-25.20, up 26.1-28.4 per cent.

"It took us 23 years to reach the first billion dollars in revenues, while we reached the next billion in 23 months," said Mr Nandan Nilekani, CEO, President, and Managing Director.

"The global IT services market is poised for good growth as the spend is expected to be robust this year. We are in an excellent position in terms of brand to cash in on that," he added. According to him, the company's cash and cash equivalents exceeded $1 billion.

Organic growth

"The guidance does not assume large deals," said Mr Nilekani, adding that it would be mainly from secular organic growth. Further, he said, the company was "somewhat hesitant" to commit large resources in a buoyant market at lower prices while chasing large deals.

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(This article was published in the Business Line print edition dated April 15, 2006)
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