Infosys Q4 net up 66%

Infosys Technologies today reported a surge in profits, but forecast weaker-than-expected growth as US customers busy implementing new accounting rules slowed their outsourcing orders.

The software major posted revenue of Rs 1,987.32 crore, up 47.27 per cent year on year, and net profit of Rs 558.64 crore, up 66.64 per cent year on year, for the quarter ended March 2005.

The revenue for the full year (2004-05) was up 46.91 per cent to Rs 7,129.65 crore and the net profit was up 52.11 per cent to Rs 1,891.67 crore. Sequentially, the fourth-quarter revenue grew 5.96 per cent and net profit 12.33 per cent.

The earnings per share in the January-March were Rs 20.68, up 64.26 per cent year on year, and Rs 70.48 for the full year, up 50.44 per cent.

Net profit after taxes includes a $11 million (Rs 45.19 crore) sale of the company's stake in Yantra, a US-based provider of supply-chain management solutions.

Without the exceptional item, the net profit for the quarter was Rs 513.45 crore, up 53.16 per cent and Rs 1,846.48 crore for the year, up 48.48 per cent. The earning per share (EPS) was Rs 19.01, up 50.99 per cent, and Rs 68.79 for the year, up 46.83 per cent.

Growth is this quarter, however, would be flat said Nandan M Nilekani, president, chief executive officer and managing director of Infosys, as key customers were holding back IT spending while dealing with compliance issues such as the Sarbanes-Oxley Act.

He added that "a handful of others were undergoing internal re-organisations" in the financial services sector that contributed over a third of the IT services firm's revenues.

Sequential revenue growth for the three months to June 2005 would be between 0.7 per cent and 1.6 per cent, Nilekani said.

Basab Pradhan, head of worldwide sales for Infosys, said, he saw "no other macro trends" that would cause the flat growth this quarter. In rupee terms, the guidance for the full year sees revenue growth of around 25.7 per cent and EPS growth of 24 per cent.

This quarter, revenues are expected to grow between 32 per cent and 33.2 per cent to between Rs 2,002 crore and Rs 2,020 crore. EPS from ordinary activities is expected to be Rs 19.30, up 32.7 per cent year on year.

For the financial year 2005-06, revenues are expected to grow between 24.7 per cent and 26.6 per cent to Rs 8,890 crore and 9,029 crore. The earning per share growth is expected to be Rs 84.60 to Rs 85.90, growing 23.0 per cent to 24.9 per cent.

In dollar terms, Infosys would end the current financial year with revenue of between $2.038 billion and $2.07 billion, Nilekani said, assuming Rs 43.62 to a dollar.

Dollar-term revenue growth forecast for the year is between 28 per cent and 30 per cent. If the firm meets its forecast, it will have taken 23 years to reach a billion dollars in revenue but about two years to double that figure.