Infosys raises guidance on back of global economic recovery

MYSORE - Buoyed by signs of global economy recovery, India’s IT major Infosys Technology Ltd. has revised upwards its revenue forecast for fiscal 2009-10.

On Tuesday it projected consolidated income of Rs.22,500 crore (Rs.225 billion/$5 billion) for this fiscal, signalling an average growth of 3.7 percent year-on-year (YoY), as per the Indian accounting standard.

Global economic recovery seems to be led by the US and the financial services, Infosys chief executive S. Gopalakrishnan said in a statement here.

In the beginning of the third quarter (October-December), the company had said its annual revenue would grow to Rs.22,000 crore or by 1.5 percent YoY, as per the Indian accounting standard.

Under the International Financial Regulatory System (IFRS), consolidated revenues for FY 2010 are expected to be $4.75 billion, a marginal growth of two percent YoY, as against the earlier projection of $4.6 billion or one percent YoY.

Offshore outsourcing is expected to benefit from the global economic recovery even though IT budgets are projected to be flat in 2010, Gopalakrishnan added.

Similarly, encouraged by better performance in the third quarter, the company projected a consolidated income of Rs.5,698 crore (Rs.56.98 billion) for fourth quarter (Jan-March) of this fiscal (FY 2010), a growth of 1.5 percent YoY, as per the Indian accounting standard.

Under the International Financial Regulatory System (IFRS) too, revenue is expected to be $1.25 billion, a growth of 12 percent YoY.

Though net profit at Rs.1,582 crore for third quarter (October-December) of this fiscal declined 3.6 percent from Rs.1,641 crore in the same quarter a year ago, it grew 2.7 percent sequentially from the second quarter’s (July-September) Rs.1,540 crore, as per the Indian accounting standard.

Similarly, consolidated income for quarter under review (Q3) marginally declined 0.8 percent to Rs.5,741 crore from Rs.5,786 crore in the same quarter a year ago, but grew 2.8 percent sequentially from Rs.5,585 crore in the second quarter this fiscal, as per the Indian accounting standard.

The contribution to our revenues from our top 10 clients grew by 12.2 percent during the quarter and our clients are taking decisions much faster, chief operating officer S.D. Shibulal said.

As is its wont, the company beat its guidance of Rs.5,452 crore it gave for the third quarter, projecting a decline of 5.8 percent.

Our focus on new engagements models was strengthened by the launch of Flypp, the latest technology platform for telecom service providers during the quarter, Shibulal pointed out.

Under the IFRS, net income, however, marginally increased 0.6 percent YoY to $334 million and consolidated revenues 5.2 percent YoY to $1.23 billion, thanks largely to rupee appreciation during the quarter.

The rupee appreciated by 3.7 percent during the quarter, enabling us to maintain our margins, chief financial officer V. Balakrishnan said.

Similarly, though earnings per share (EPS) declined 3.2 percent to Rs.27.75 in the third quarter from Rs.28.66 during the same quarter a year ago, it grew 3.3 percent sequentially (quarter-on-quarter).

The company and its subsidiaries added 32 clients for the quarter as against 35 in second quarter and 30 in the third quarter a year ago.