Indian software bellwether Infosys Technologies Ltd is facing sustained pricing pressures from its clients, its deputy managing director said on Friday.
But a rising wave of outsourcing business from overseas clients seeking to cut costs was a redeeming factor, Kris Gopalakrishnan told Reuters in a phone interview after the firm announced its third-quarter results, which was below market expectations.
"Out ability to raise rates is simply not there," Gopalakrishnan said. "Customers are still very, very cautious."
He said costs were up on sales and marketing and also on account of compliance with US laws that require minimum wages for Infosys workers sent there on on-site assignments.
Gopalakrishnan said revenue per employee was down 0.4 per cent in the quarter to December from the previous quarter.
"It is still volume driven growth. A recent appreciation in the rupee affected gross margins but was offset by better treasury operations," he said.
The Bangalore-based firm, India's second largest software service exporter, posted a net profit of Rs 2.56 billion (Rs 256 crore), up from Rs 2.06 billion (Rs 206 crore) in the year-ago period.
The results were below a median profit of Rs 2.67 billion (Rs 267 crore) forecast by 12 analysts in a Reuters poll released earlier this week.
