Infosys is back in the double digits but not ready to cry "recovery"

I have just got off the phone with Infosys’ European boss BG Srinivas. We were talking about the company’s latest results which were pretty good.

When I described them as quite good he said: “you are always hard to please Karl.” But to be honest I am not really a numbers man and sometimes can’t even tell if financial results are good or bad.

This company’s second quarter results could suggest a recovery is on the cards. Infosys reported a 10.2% increase in revenue compared to the previous quarter and 29.6% more than the same quarter last year.

Srinivas says the company now expects revenue growth for the full year 2010/11 to grow 24% to 25%. Pretty good when you consider that in its 2008/09 financial year, at the height of recession, it recorded an 11.7% drop in revenues compared to the previous year.

He was naturally cautious when I asked him whether the recovery had arrived. “It is too early to say whether the good times are back. However the client business environment is stable and they continue to spend,” he told me.

Infosys added 27 new customers in the last few months and signed some large deals to transform customer businesses. It also added over 14,000 employees.

I blogged recently about how the outsourcing sector could actually benefit from the government cuts so I also asked BG whether Infosys would target any UK government business? He said not for now.

 He said the company has a lot of room to grow in the private sector. It has 110 clients in Europe out of a potential basket of 500, he says.

The second quarter numbers:

Revenue was $1,496m. 10.2% increase on previous quarter and 29.6% increase in the previous year’s second quarter.
Profit was $374m which was a 14.7% increase on the last quarter and 18.0% year on year.