Breaking the $1 billion revenue mark in a quarter for the first time, information technology (IT) major Infosys Technologies Ltd has clocked a year-on-year net profit of Rs 1,100 crore, a growth of 18.4 percent on the second quarter figure of last year. The appreciating rupee’s effect, however, showed up in the company’s sluggish growth rates in revenues and profits over the first quarter of the current fiscal.Infosys registered Q2 revenues of Rs 4,106 crore, a growth of 19 per cent over Q2 of 2006-07 but an 8.8 per cent rise over Q1 of 2007-08. The net profit for the company grew by 1.9 per cent from Rs 1,079 crore to Rs 1,100 over the first two quarters of this fiscal year.“Though the rupee has appreciated 12 per cent this year, our unique business model has helped us manage margins. Managing abrupt changes is challenging for any company but we have recovered quickly and made up,” said Infosys CEO and managing director Kris Gopalakrishnan. “We have achieved yet another milestone by crossing $1 billion in revenues this quarter. In an increasingly flat world our business model, combined with our value proposition, continues to help our clients grow profitably.”The company expects to suffer a loss of Rs 2,000 crore in revenue for the entire financial year on account of the fluctuating rupee and overall margins may be 50 to 100 basis points below what they were last year, informed Infosys CFO V Balakrishnan. “Our operating margins improved during the quarter despite the appreciating rupee. We are proactively hedging our currency exposures to mitigate this impact. Our hedging position as of September 30, 2007, was $ 1.4 billion,” he added.Infosys sees a very good environment for the IT services business and offshoring, in particular, continues to grow — as is reflected in the Infy results, Gopalakrishnan said. The company has projected a year-on-year revenue growth of 16 to 16.5 per cent, in the range of Rs 4,238 crore to Rs 4,258 crore, for the next quarter and 19.4 per cent to 19.8 per cent, in the range of Rs 16,588 crore to Rs 16,648 crore, for the fiscal year.The company plans to hire a gross of 30,000 employees by the end of the current fiscal against the earlier announced 26,000, HR director T V Mohandas Pai said. As on September 30, the employee count of the company stood at 80,501, he said. The company has announced an interim dividend of Rs 6 per share compared to Rs 5 per share issued for the corresponding period last year.Religare Securities president (Equity) Amitabh Chakraborty said, “In line with our expectations, the management has increased the growth guidance for FY 08 both in $ as well as in rupee terms. However, the magnitude of the revision has fallen short of street estimates. Despite good results, we expect the negative sentiment in the sector to remain unchanged. Concerns over the demand environment and rupee appreciation still linger.” “With growth expectations being much slower than historically, we believe that the valuations of the company would remain under pressure. We expect the stock price to be governed by movements in the rupee exchange rates,” he said. “Infosys results are lower than expectations. Software stocks fell out of favour with investors after the rupee started accelerating versus the dollar. The inevitable happened and most IT firms, barring TCS to an extent, announced poor Q1 results and a weak outlook,” said an analyst with India Infoline.
