Infosys beats estimates, profit up 28%

Underscoring India’s outsourcing boom is intact, software services company Infosys Technologies Ltd reported a 28 per cent jump in quar...

Underscoring India’s outsourcing boom is intact, software services company Infosys Technologies Ltd reported a 28 per cent jump in quarterly profit and bumped up its full-year forecast on Thursday. The Infy show exceeded market expectations and sent its shares 11 per cent higher on the stock stock exchanges, pushing up the benchmark Sensex by 59 points to a 16-month high of 3,679.63.

Allaying fears of a slowdown in the technology sector, Infosys made a 28.25 rise in net profit at Rs 278.12 crore for the first quarter of the current fiscal (April-June) as against Rs 216.85 crore reported during April to June 2002. The company earned an income of Rs 1,091.98 crore during the quarter, up by 41.51 per cent over the income of Rs 764.62 crore earned for the same quarter of last year. Nasdaq-listed Infosys, kicking off the first-quarter earnings parade of Indian software companies, beat market estimates by seven per cent and predicted full-year earnings per share would rise 17 per cent. That was up from an April forecast of a 13 per cent gain.

The company said that income from software development services and products would be between Rs 1,000 crore and Rs 1,095 crore. For the current fiscal, it had forecast a turnover between Rs 4,420 crore and Rs 4,483 crore as against Rs 3,622 crore earned during the last fiscal. ‘‘There is an increased interest in offshore outsourcing as global corporations realise its benefits. Business opportunities continue to grow. However, the pricing environment remains challenging,’’ Infosys CEO, president and managing director Nandan M. Nilekani said.

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The Infy earnings guidance and results propelled tech shares to the fast track. Infosys shares jumped Rs 360 to Rs 3,614.50, adding Rs 2,400 crore ($ 518 million) to its market value. Shares of rivals Wipro Ltd and Satyam Computer Services Ltd rose between five and eight per cent. ‘‘The negative gloom on the entire sector will reduce somewhat,’’ said a fund manager at IL&FS Asset Management.

Infosys expected full-year consolidated earnings per share (EPS) would be Rs 169.2 to Rs 169.8, up about four per cent from its forecast in April. The new forecast marks a rise of 17.2 per cent from last year.

Bangalore-based Infosys sent tremors through India’s $9.5 billion-a-year technology services export sector in April when it forecast lower-than-expected earnings growth because of shrinking profit margins amid fierce competition.

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