Infosys: Fighting on

 Despite some luck in the form a depreciating rupee Infosys has managed to post just satisfactory numbers for the June quarter. The top line growth for the June 2008 quarter of Rs 4,854 crore, 6.8 per cent higher sequentially, a tad below expectations and the net profit of Rs 1,302 crore has been higher thanks to lower taxes and higher other income.

The operating margins at 30.47 per cent have been hit by about 200 basis points, due to higher salary costs and visa costs, not unusual for the first quarter.

The Bangalore-based firm has upped its rupee earnings guidance for the current year, to Rs 99.3-101.06 per share, from Rs 92.30-93.90. Even if this is only because of a depreciating rupee, it is creditable, given the extremely challenging operating environment.

The Street is disappointed with the June 2008 quarter performance ---the stock fell 7 per cent in Friday's trading session. However, the numbers have been impacted mainly by a sequential fall in revenues from Infosys' biggest customer.

Excluding the biggest client, revenues from the top ten clients have grown by about 3.8 per cent. Concerns about the banking and financial services space seem overdone because revenues from this vertical are up by about 4 per cent.

The Street is also concerned that the growth this year may be back-ended but revenues for the first half should come in at around 46-47 per cent of the total for the year.

 The deal flow remains strong -