Infy Q4 net up 17.1% to Rs 1,818 cr, trails forecast

India's second largest IT services provider Infosys Technologies disappointed the street as it missed analyst expectations. The company's net profit for the fourth quarter that ended March 31, 2011 was up 17.1% at Rs 1,818 crore compared to Rs 1,552 crore (after extraordinary items) in the corresponding quarter last fiscal. On a sequential basis (compared to last quarter) its net profit was up by 2.1%.

Revenue for the fourth quarter grew 22% at Rs 7,250 crore from Rs 5,944 crore in the same quarter last year. On a sequential basis the firms revenue grew by 2%.

The market reacted sharply Infosys shares plunged as much as 7%, as its EBIT margins declined to 29% as against the 30.2% in the previous quarter.

Meanwhile, the company's net profit in US dollar grew 18.9% on a year-on-year basis to $402 million. The sequential increase was about 1.3%. Similarly revenue grew 23.6% to $1,602 million on year on year basis.

“We expect the demand environment to be normal this year for the industry. We have created a structure with strong customer driven vertical focus and have enhanced our investment to take advantage of the opportunities we see in the market," said S Gopalakrishnan, CEO and Managing Director.

For the year ended March 31, 2011, the company has posted a net profit of Rs 6,823 crore against Rs 6,219 crore for the year ended March 31, 2010, up 9.7%. The total income has increased by 20.9% from Rs 23,732 crore to Rs 28,712 crore.

At the end of the fiscal, the company's total headcount is 130,820. It had a gross addition of 8,930 employees in the fourth quarter, and net hiring was 3,041. 34 clients were added during the quarter by Infosys and its subsidiaries. “We have had a great year at Infosys. We recruited 43,000 people, had 1.6 million person days of training and have made 26,000 offers at campus for FY12” said TV Mohandas Pai, member of the board and head – HRD and Education & Research.

“Spark reached out to 1,87,000 students during the year and Campus-Connect touched 33,047 students. We have brought attrition down to normal levels and substantially improved our investments on people," he further added.

 

Guidance:
Infosys expects earning per share in the range of Rs 126.05-128.21 for the financial year 2011-12 - growth of 5.5% to 7.3% - below analysts expectations. Revenues are expected to be in the range of Rs 31,727 crore and Rs 32,270 crore; growth of 15.4% to 17.3% y-o-y.

For the quarter ending June 30, 2011 the company expects revenue to be in the range of Rs 7,311 crore and Rs 7,382 crore; growth of 18.0% to 19.1% y-o-y.

The company has also announced a dividend of Rs 20 per share.

At 1121 hrs, the shares of Infosys post disappointing results were trading down by 7.60% on at Rs 3,054 on the Bombay Stock Exchange.