Infosys beats forecasts, pulls off 35% net profit growth

13 July, 2007:

Beating market forecasts, Infosys Technologies Limited, India’s second-biggest software company, has achieved a 35% rise in net profit in the first quarter of 2007.

The company’s increase in net profit was spurred by a strong growth in outsourcing orders. However, the company announced a first-ever cut in its earnings guidance for the current fiscal year on concerns over the rupee’s strength.

Consolidated net profit for the quarter ended June 30, 2007, was Rs 10.79 billion ($268 million), or Rs 18.82 a share, up from Rs 8 billion in the same period in 2006, Infosys Technologies Limited said in a statement.

The average of a Dow Jones Newswires poll of seven analysts had forecast net profit at Rs 9.78 billion. The company had revised its dollar earnings forecast upwards and rupee earnings forecast downwards.

Kris Gopalakrishnan, chief executive officer of Infosys Technologies Limited, commented: “As clients recognise the strategic imperative of global sourcing in an increasingly flat business world, the demand for large end-to-end players like Infosys continues to be strong. And, we continue to focus on being a partner of choice to our customers.”

The company and its subsidiaries added 35 new clients during the quarter, offsetting a steep appreciation in the rupee that dented dollar earnings, higher visa costs, and wage inflation.

The company scored a 25% year-on-year increase in sales at Rs 37.73 billion during the three months. Infosys had a tax write-back of Rs 510 million.

Infosys Technologies was founded 26 years ago by a group of seven software professionals led by N R Narayana Murthy, now the company’s chief mentor. The company, which employs 75,971 people, has been at the forefront of India’s booming software industry.




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