It bellwether Infosys Technologies Ltd outperformed market estimates for the first quarter of the current fiscal but also reduced projections made earlier for the revenues for 2009-10 fiscal year. A day after bidding farewell to its co-chairman and cofounder Nandan Nilekani,Infosys on Friday registered a net profit after tax of Rs 1,527 crore for the first quarter of the fiscal,notching a 17.3 per cent growth in profits when compared to the same period of last year but a 5.3 per cent dip in the sequential quarter.
Infosys reported a first quarter revenue of Rs 5,472 crore,a 12.7 per cent growth when compared with the same period of last year but a 2.9 per cent decline over the last quarter (sequential). With the results beating market estimates,Infy shares rose 2.97 per cent to Rs 1,726.50 on the bourses. Other IT stocks like Wipro and TCS also gained ground in a weak market.
The company had originally forecast revenues between Rs 5,379 crore and Rs 5,480 crore. In dollar terms,the company generated revenues of $ 1,122 million against an April 15,2009 forecast of $ 1,060 million to $ 1,080 million.
However,it has lowered guidance for the current year. Recasting its projection for the whole year,Infosys brought down its forecast for annual revenues down to the range of Rs 21,416 crore and Rs 21,747 crore indicating a possible negative annual growth in rupee terms for the first time in the minus 1.3 per cent to a positive 0.3 per cent range. In its April projections the company had put the annual revenue forecast in the Rs 22,066 crore Rs 22,928 crore range indicating a positive growth between 1.7 to 5.7 percent.
A volatile currency environment,an economic crisis that could extend to the middle of 2010,reduction in the volume of work have all been cited as reasons for the caution on the business outlook front by the Infosys top management. We believe in the short term the global economic environment will continue to be challenging. We are working closely with our clients to help them navigate the downturn. We continue to invest in the future to take advantage of the growth opportunities in the medium to long term, CEO and managing director Kris Gopalakrishnan said. In the medium to long term we believe the growth story for IT services remains and will continue, he said.
In dollar terms,Infosys has changed its April projection for annual revenue from the $4.35 billion and $4.52 billion,a 6.7 per cent to 3.1 per cent decline range,to the range of $4.45 billion and $4,52 billion,a decline of 4.6 per cent to 3.1 per cent.
Commenting on the performance of the company in the first of the current fiscal, Gopalakrishnan said it was a good quarter. We improved on our guidance in dollar terms. He added that there was need for caution on account of volatility.
The Infosys CEO said the company is pursuing a few deals with governments in India in the current depressed environment. You will see PSUs grow as an industry vertical in the India business in the coming days, he said.
Initial signs of global economic recovery that emerged in the last quarter have vanished affecting business,officials said. The green shoots seem to have disappeared. There is a lot of uncertainty due to contradictory data. It could be a more protracted downturn, said the companys head for the banking and financial services business Ashok Vemuri.
The company has reported under utilization of employees on account of the business environment and a 1.1 per cent reduction in the volume of work. This has been used as an opportunity to increase education and training for employees,Gopalakrishnan said. Infosys has reported an increased involuntary attrition rate of 2.9 per cent that is attributed to exits on the basis of performance analysis. Total attrition for the first quarter was pegged at 11.1 per cent in the currently 1,03,905 employee company.