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IT Recession? Yeah Right!

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    IT Recession? Yeah Right!

    Infosys profit exceeds forecast, rises 50 per cent


    Bangalore, July 10: Infosys Technologies, India's second-largest software exporter, reported on Tuesday that their net profit rose by 50 percent in April-June from last year, beating expectations. Despite the stronger-than-expected first-quarter results, Infosys said it was not changing its forecast for the rest of this year to next March. Infosys forecast a total income of 25 billion to 25.6 billion rupees for the year.

    "While we have exceeded our earlier guidance for the first quarter, we have not seen any material change in the external environment to revise our annual revenue growth forecast of 30 percent for fiscal 2002," Infosys' chairman Narayana Murthy said in the same statement.

    NASDAQ-listed Infosys said April-June net profit rose to 1.9 billion rupees ($40.3 million) or 28.59 rupees per share, from 1.27 billion rupees or 18.93 rupees compared to the same period a year ago. Total income rose 68.9 percent to 6.26 billion rupees. This has exceeded the consensus net profit estimate of 1.84 billion rupees in a Reuters poll of 12 brokerages.

    Net profit rose 4.4 percent from the previous January-March quarter, compared to expectations of a mere 1.45 percent increase. "Infosys has surpassed expectations both on profit and total income," said Chetan Shah, a technology analyst at DBS Securities in Bombay.

    "The client additions are encouraging considering the current environment. In the light of the company guidance, we plan to revise our whole-year profit estimate upwards." The technology bellwether added 26 clients in April-June, against 37 in January-March, the highest quarterly figure ever.

    Bangalore-based Infosys, the first Indian Software Company to report results for the past quarter, had forecast in April a total income of 5.8 billion to 5.9 billion rupees. Infosys announced the results before the start of trading on Tuesday and noted that shares were up 1.7 percent at 3,580 rupees in mid-morning trading. The Bombay Stock Exchange benchmark index was up 0.65 percent at that time.

    At Monday's closing level of 3,519.65 rupees, Infosys' shares were down 61 percent from a 52-week high of 8,930 rupees struck on September 12, but up 29 percent from the 52-week low of 2,720 hit on April 12, 2001, when it forecast a sharp slowdown in growth this year.

    Infosys said it had faced pricing pressures from both existing and new customers, especially in new, large, offshore projects. But it said it had maintained net margins "within an acceptable band" through cost control measures and the 69 percent increase in revenue on year was due to a 10.9 percent quarter-on-quarter rise in volume, which more than offset a 2.9 percent drop in prices.

    A Company statement quoted Chief Financial Officer T.V. Mohandas Pal as saying "The pricing environment has become challenging since our customers are looking for higher returns on their technology investments".

    After releasing its first-quarter results, Infosys estimated total income for the current July-September period at 6.25 billion to 6.4 billion rupees, little changed from the past quarter.

    Analysts have warned the current July-September period could be "more difficult" as top clients, reeling under a U.S. slowdown, slam the brakes on software orders.

    Infosys serves a raft of Fortune 500 customers including Nortel Networks and Cisco Systems. It splits its workload equally between India and client sites abroad through its army of about 9,000 software engineers. ($1 = 47.16 Indian rupees)

    That's very interesting and I think good news for the south asian economy. But I believe in USA/Europe the IT recession will continue.

    Many multinationals are moving their IT to South Asia, which of course serves companies like Infosys and other Indian IT companies and to some extent Pakistani companies as well. But it definitely harms the IT industry in the industrialized countries.

    Now let's just hope, that this positive trend is not interupted by some useless fighting between Pak-India, because then these companies would hesitate to invest their money on "unsafe soil".

    Umer, the Pakistani Brain of Austria
    The Pakistani Brain of the Austria (formerly known as "The Pakistani Brain of UAE")


      ummm guys.... keep yur pro indian propaganda out of careers and academics please....

      We know india is a big IT country and all that. And we also know that Info Sys is a big company. But I dont see how it comes under this Forum. This forum and Tech Talk are different type of forums so please dont pollute them with yur useless arguments. We discuss things here not debate. I hope you'll be considerate.

      I request the MOD to delete or move this thread, before this becomes a practice.

      ICBM Target Coords: 27.500S, 153.017E