In-the-black Friday: Infy leads the way

Signalling that the tech sector is still up and kicking, revenues during the period increased by 29 per cent at Rs 1,134.75 crore over Rs 879.57 crore recorded during the second quarter in 2002.

The Infosys results boosted the stock market with the stock rising 3.94 per cent to Rs 4,608.65 on renewed buying. Other tech stocks also soared and the benchmark Sensex was up by 70 points to 4,768.90.

‘‘The Infosys results will dispel the uncertainty surrounding the tech sector,’’ said a Dalal Street analyst.

‘‘Growth continues to be strong. Pricing is showing signs of stability,’’ Infosys CEO, president and managing director Nandan M. Nilekani said. Infosys was making investments in order to enhance its end-to-end solution capability, he added.

Earnings per share from ‘‘ordinary activities’’ increased by 32.8 per cent to Rs 45.30 a share from Rs 34.10 reported in the corresponding quarter of last year. According to a company statement, Infosys has also added 29 new clients during the quarter and 2,025 new employees on its rolls. It now hires 20,000 employees. As per its outlook, Infosys’s revenue will touch the one billion-dollar mark this fiscal.

The company announced an interim dividend of Rs 14.50 per share (290 per cent on an equity share of par value of Rs 5 each) as compared to Rs 12.50 (250 per cent) for the second quarter last year.

Projecting a better outlook for the full year, Nilekani said income from software development services and products is projected to be between Rs 4,550 crore and Rs 4,578 crore—well over the $1 billion mark.

Earnings per share is expected to be between Rs 178 and Rs 178.40, Infosys said in a statement to the stock exchanges. For the third quarter ending December 31, Infosys said income from software development services and products is projected to be between Rs 1,153 crore and Rs 1,162 crore. Earnings per share is expected to be between Rs 45.30 and Rs 45.40.

Increasing its revenue guidance, Nilekani said it aimed to exceed revenues of $1 billion during the current financial year. On its BPO subsidiary Progeon, Infosys said it projected its revenue to be between Rs 18-19 crore in the third quarter between October and December 2003.

Making China a hub for its software services in the Asia-Pacific market, Infosys also announced plans to set up a software development centre in Shanghai with 200 professionals.

Experts say this would give Infosys a toehold in a rapidly growing market and would help the company diversify its sources of revenue away from the U.S which currently accounts for some 60 percent of its income.

‘‘The idea of going to China is to tackle the local market,Asia-Pacific market and look at the world market,’’ said Mohandas Pai, Chief Financial Officer.China is expected to spend $9.4 billion on technology services by 2006, up from $3.74 billion in 2002.

Other leading Indian firms such as unlisted Tata Consultancy Services, the country’s No.1 software services exporter, and Satyam Computer Services, the No. 4 exporter, have already set up shop in China to tap its strong hardware base and high PC penetration.

‘‘Besides serving the multinational clients who have moved toChina, these companies can also use China as a sourcing base for servicing the East Asian market,’’ said Kiran Karnik, President of the National Association of Software and Service Companies. –with Reuters