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Infosys grows revenues despite sluggish economy

Infosys Technologies, India's second largest software exporter, reported an 8.7% year-on-year growth in profit following an upturn in demand for services in Europe.

But the company, which specialises in IT outsourcing, said the economic climate continues to be difficult.

Infosys reported revenues of $1,296m for the quarter ended 31 March 2010, equivalent to a quarter-on-quarter growth of 5.2%. Year-on-year growth was 15.6%.

The news comes as Gartner predicted 5.3% growth in worldwide IT spending this year as businesses and consumers step up their spending on hardware.

"We have been able to take advantage of the opportunities in the market and grow faster due to our investments in capacity and capability building even during the economic downturn," said Infosys CEO and managing director S. Gopalakrishnan. "Though the economic environment continues to be challenging, businesses are investing in growth to build a better future."

Net income after tax reached $349m for the quarter, a quarter-on-quarter growth of 4.5% and a year-on-year growth of 8.7%.

Earnings per American Depositary Share were $0.61 for the quarter, up 3.4% quarter-on-quarter and 8.9% year-on-year.

The company was bullish about its prospects for the rest of the year, despite slow growth in the global economy.

It forecast consolidated revenues in the range of $1,330m to $1,340m for the quarter ending June 2010, which would represent year-on-year growth of between 18.5% and 19.4%.

Consolidated earnings per American Depositary Share are expected to be in the range of $0.55 to $0.56, a year-on-year growth of 0% to 1.8%.

For the year ending 31 March 2011, Infosys predicts consolidated revenues between $5,570m and $5,670m, a year-on-year growth of 16% to 18%.

It predicts consolidated earnings per American Depositary share in the range of $2.40 to $2.50, a year-on-year growth of 4.3% to 8.6%.

Infosys chief financial officer V. Balakrishnan said currency volatility continues to be a concern, but Infosys has an active hedging programme to minimise the impact on its margins.

"We maintained our margins in one of the toughest years for the industry while our cash and cash equivalents reached $3,500m," he said.

During the course of the year, Infosys said it took on an additional 3,914 staff and added 47 clients.


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