Indian IT major Infosys Technologies has posted robust results in the second quarter ending September 2005 showing a 35.57 per cent increase in its net profits at Rs 606 crore (Rs 6.06 billion).
The IT major's Q2 revenues stood at Rs 2,294 crore (Rs 22.94 billion).
Highlights
Others
"We have seen robust growth during the quarter due to our effective focus on offering a broad array of services to our clients," said Nandan M Nilekani, CEO, President and Managing Director. "It took us the whole of fiscal 2004 to reach a revenue of $1 billion. We reached the same level in the first six months of this year."
Business outlook
The company's outlook (consolidated) for the quarter ending December 31, 2005 and the fiscal year ending March 31, 2006, under Indian GAAP and US GAAP, is as follows:
Outlook under Indian GAAP consolidated
Quarter ending December 31, 2005*
Fiscal year ending March 31, 2006*
* conversion 1 US$= Rs 43.94
Outlook under US GAAP
Quarter ending December 31, 2005
Fiscal year ending March 31, 2006
"During this quarter we recruited 8,026 employees (gross), which is the highest ever during any quarter," said S Gopalakrishnan, Member of the Board and COO. "Our investments in creating a world-scale global education center coupled with our spend on education and research has enabled us to scale up rapidly."
Dividend declaration
The company has declared an interim dividend of Rs 6.50 per share (130% on an equity share of par value of Rs 5 each) at the board meeting held on Tuesday. An interim dividend of Rs 5.00 (100% on an equity share of par value of Rs 5 each) was declared for the corresponding period in the previous year. The record date for payment of dividend will be October 18, 2005.
Expansion of services and significant projects
Infosys won its single largest multi-year, multi-million dollar contract from ABN AMRO to develop, support and enhance a wide spectrum of applications. This reinforces our belief that the offshoring of large deals is a mega trend. In a continuing partnership with a Swiss market leader in IT outsourcing and business service provisioning services, Infosys is providing a core banking services platform to the private banking sector in Europe.
Further, Infosys entered into a high-volume, multi-year strategic engagement with a large hi-tech company to unify its IT systems across multiple branches and subsidiaries.
Infosys is helping clients realize value from investments in Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and other enterprise applications for business transformation.
Infosys is working with a leading certification agency in Europe to implement a next-generation business, CRM and production support system, which will support the client's evolving business needs. A leading software vendor has engaged Infosys to implement a large end-to-end SAPenabled business transformation initiative.
A leading document management technology company transitioned an existing product to Infosys to optimize its market positioning and operations, leveraging Infosys' Product Stewardship Program. In addition, Infosys is advising a leading discrete manufacturer on reducing costs through business process outsourcing of HR operations.
The strategic engagement includes a PeopleSoft implementation.
Leading companies in the banking, capital markets and financial services sectors are seeking Infosys' domain expertise and industry-specific solutions to address their business problems. A leading diversified financial services company engaged Infosys to define a strategy for streamlining systems and processes to improve operational efficiency.
Infosys' Operational Risk Management Solution is enabling an investment management and outsourcing company to create an enterprise-wide framework to define, identify, measure, mitigate and report risk across key client business lines.
Infosys' Independent Validation Services are enhancing the competitiveness of key clients across industries, including an international leader in investment banking and financial services and a leading Europe-based retailer.
"The ABN AMRO deal, signed this quarter, signifies the entry of Infosys into the arena of large, global, multi-year outsourcing contracts and is an endorsement of our competitive business model," said S D Shibulal, Member of the Board and Head - Sales and Delivery. "Our strong customer service engine is enabling us to address client needs effectively."
Finacle
Finacle, the universal banking solution from Infosys, further consolidated its position among global Tier 1, Tier 2 and large regional banks, particularly in the strategic Europe market. A global top 100 bank headquartered in Europe licensed Finacle core banking, CRM, consumer e-banking and wealth management solutions to power its retail banking initiative in India.
One of the top 5 banks in Russia licensed Finacle universal banking solution. One of the top 3 banks in Nigeria signed up Finacle to power its business transformation initiative. A leading financial services company in Australia will deploy Finacle core banking and consumer e-banking solutions.
Liquidity and capital expenditure
Cash and cash equivalents, including investments in liquid mutual funds, increased by Rs 528 crore (Rs 5.28 billion) during the quarter, from Rs 3,265 crore (Rs 32.65 billion) to Rs 3,793 crore (Rs 37.93 billion), after incurring capital expenditure of Rs 303 crore (Rs 3.03 billion). Operating cash flows for the quarter ended September 30, 2005 were Rs 629 crore (Rs 468 crore) for the quarter ended September 30, 2004).
"The pricing environment is stable with an upward bias. We have maintained margins despite record hiring of employees during the quarter," said T V Mohandas Pai, Member of the Board and CFO. "Liquid assets have gone up by Rs 528 crore. The rupee has depreciated during the quarter creating a more benign margin environment."
Disaster relief
Infosys has committed Rs 1 crore (Rs 10 million) for the relief of flood-affected people in North Karnataka. In addition, the Board unanimously committed Rs 2 crore (Rs 20 million) for the victims of the October 8 earthquake - Rs 1 crore (Rs 10 million) for the people in Jammu and Kashmir, and an equal amount for those in Pakistan. The company also committed Rs 50 lakh (Rs 5 million) to aid the victims of Hurricane Katrina in the US.
"Infosys always has and will be concerned about the welfare of people," said N R Narayana Murthy, Chairman and Chief Mentor. "Caring corporations all over the world respond to natural calamities."