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| Infosys rides out recession year |
| BS Reporter / Bangalore Apr 14, 2010, 00:50 IST |
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Gives impressive revenue growth guidance of 16-18 per cent.
Infosys Technologies, India’s second-largest software services company, has managed to swim through the recession-filled past financial year with its head just above water, even as it hoped the current year will bring better tidings. The company, once again, is also bracing against the vagaries of the appreciating rupee, which went up by six per cent last quarter. Still, the information technology (IT) major gave a better than expected revenue growth guidance of 16-18 per cent for the current financial year.
It managed to hold its fourth-quarter net profit numbers at almost the same level, at Rs 1,600 crore, just under one per cent less than the corresponding figure last year. The top line, led by volumes, increased by 5.5 per cent to Rs 5,944 crore.
Earnings per share (EPS) for the fourth quarter was Rs 28, compared with the company expectation of Rs 25.83 per share. For FY10, the company posted an EPS of Rs 108.9, nearly two per cent more than the upper end of the earlier forecast.
The company, which went through one of the most severe economic downturns in its three-decade history, posted a 4.1 per cent increase in yearly net profit to Rs 6,219 crore, on top line growth of 4.8 per cent during the last financial year to Rs 22,742 crore. Infosys hopes that with revival in the global economy, top line will grow by 9-11 per cent for FY11. The company posted a 7.4 per cent increase in operating profit, to Rs 1,789 crore, for the fourth quarter on a year-on-year basis.
It was able to swing five major deals in the range of $50-100 million during the past quarter and added 47 clients, its strongest during the past two years, taking the total number to 575. "The last quarter was excellent for us, when we not only added a large number of Fortune 2000 clients, but our top 25 clients grew by 7.6 per cent," said S Shibulal, COO.
Despite the healthy projection of growing its topline, Infosys has once again played it safe on its two per cent growth prediction for EPS. The company has said appreciation of the rupee and 14-17 per cent wage hikes to employees in India with effect from April 1 are reasons for the muted guidance.
Dipen Shah of Kotak Securities said: “The results were almost in line with expectations. In FY11, the EPS growth guidance is muted because of the rupee appreciation, off-shore salary hikes of 14 per cent and the higher tax rates. The margin profile may look better with higher revenue growth rates, assuming the rupee remains range bound.”
“We maintained our margins in one of the toughest years for the industry, while our cash and cash equivalents inched toward Rs 16,000 crore. The currency volatility is a concern. We, however, have an active hedging programme for $515 million to minimise its impact on our margins,” said V Balakrishnan, CFO, Infosys Technologies.
Meanwhile, the company announced a final dividend of Rs 15 per share for the financial year.
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