Infosys net up at Rs. 300 cr. in Q2

BANGALORE OCT. 10. The IT bellwether Infosys Technologies brought cheer to the markets on Friday with a 32.9 per cent increase in the net profit to Rs. 300 crores in the second quarter ended September 30, 2003 compared to the same period last year. It also increased its EPS forecast for the full year to Rs. 178-Rs. 178.40, up 6 per cent from the estimate at the end of the first quarter.

A confident CEO, President and Managing Director of the company, Nandan Nilekani, told reporters here that "pricing is showing signs of stability'' and the company aimed at over one billion dollar revenue for the financial year. The bullish guidance comes notwithstanding worries over the new lower limit on H1B visas and a strengthening rupee.

S. Gopalakrishnan, member of the board and chief operating officer said the visa limit would not affect earnings in the next one to two years. Beyond that, the company would study the way the issue was going and take appropriate measures.

Mohandas Pai, member of the board and chief finance officer, said the company had hedged $139 million of forward sale, at Rs. 46.70 to a dollar. A strengthening rupee could hurt margins, he said.

Both operating margins, now at 33.3 per cent, and billing rates (onsite up 1.4 per cent and offshore up 2.5 per cent) were stabilising, Mr. Nilekani said. Volumes had shown a quarter-on-quarter growth of 8 per cent. The offshore business continued to grow in the quarter he said. The onsite business had lost 1.8 per cent to end the quarter at 32 per cent, while a corresponding growth had been seen in the offshore business.

Income from software development services and products was Rs. 1,134.75 crores for the latest quarter under reference, up 29 per cent over the same period last year. From Rs. 1,082 crores for the first quarter, income had grown by 4.9 per cent, with half yearly income at Rs. 2,216.73 crores.

The net profit after tax was Rs. 300.16 crores, up 32.9 per cent over the same period in the previous year. The second quarter net profit is higher by 7.9 per cent over the first quarter. The half yearly profit stands at Rs. 578.28 crores.

Earnings per share from ordinary activities increased by 32.8 per cent to Rs. 45.30 for the second quarter from Rs. 34.10 in the corresponding period last year. From Rs. 41.99 at the end of first quarter, EPS has grown 7 per cent, with half yearly EPS at Rs. 87.29.

The company added 29 new clients during the quarter and there was a net increase in its staff strength to 2,025 people.

The company declared an interim dividend of Rs. 14.50 per share (290 per cent on an equity share of par value of Rs. 5), compared to Rs. 12.50 (250 per cent) for the same period last year. For the three months ending December 31, 2003, income from software development and products is projected to be between Rs. 1,153 crores and Rs. 1,162 crores, with EPS between Rs. 45.50 and Rs. 45.60. Income from the BPO outfit, Projeon, was expected to be between Rs. 18 crores and Rs. 19 crores.

Consolidated income was expected to be between Rs. 1,171 crores and Rs. 1,181 crores, with EPS between Rs. 45.50 and Rs. 45.60. For the year ending March 31, 2004, income from software services and products was expected to be between Rs. 4,550 crores and Rs. 4,578 crores. Consolidated income for the year would be between Rs. 4,623 crores and Rs. 4,658 crores. Conversions are at Rs. 45.40 to a dollar.

As more clients came to grips with the "global delivery model,'' offshoring was likely to grow and Infosys would be replacing some sub-contractors with its own people, Mr. Nilekani said.

Finally, on the latest sexual harassment case, filed by a former employee, Jennifer Griffith in a California court against the company and a former officer and member of the board, Mr. Nilekani said, "we are studying the allegations.''