Infosys Q3 PAT at Rs 1,582 crore

Software major Infosys Technologies reported a Q-o-Q 2.7 per cent rise in net profit after tax at Rs 1,582 crore (Rs 15.82 billion) for the quarter ended December 31, 2009.

"Global economic recovery seems to be led by the US and the financial services," said S Gopalakrishnan, CEO and managing director of infosys. "Even though IT budgets are expected to be flat in 2010, offshore outsourcing is expected to benefit from this recovery."

Highlights

Consolidated results for the quarter ended December 31, 2009:

• Income was Rs 5,741 crore (Rs 57.41 billion) for the quarter ended December 31, 2009; QoQ growth was 2.8%; YoY decline was 0.8%
• Net profit after tax was Rs. 1,582 crore (Rs 15.82 billion) for the quarter ended December 31, 2009; QoQ growth was 2.7%; YoY decline was 3.6%
• Earnings per share decreased to Rs. 27.75 from Rs. 28.66 in the corresponding quarter of the previous year; QoQ growth was 3.3%; YoY decline was 3.2%

"The contribution to our revenues from our top ten clients grew by 12.2% during the quarter. Our clients are taking decisions much faster," said S D Shibulal, chief pperating officer, infosys. "Our focus on New Engagement Models was strengthened by the launch of Flypp, our latest technology platform for telecom service providers."

Business outlook

The company's outlook (consolidated) for the quarter ending March 31, 2010 and for the fiscal year ending March 31, 2010, under Indian GAAP and International Financial Reporting Standards (IFRS) is as follows:

Outlook under Indian GAAP - consolidated*

Quarter ending March 31, 2010

• Income is expected to be in the range of Rs 5,675 crore (Rs 56.75 billion) and Rs 5,721 crore (Rs 57.21 billion); YoY growth of 0.7% to 1.5%
• Earnings per share is expected to be in the range of Rs 25.62 and Rs 25.83; YoY decline of 9.0% to 8.3%
  Fiscal year ending March 31, 2010
• Income is expected to be in the range of Rs 22,473 crore (Rs 224.73 billion) and Rs 22,519 crore (Rs 225.19 billion); YoY growth of 3.6% to 3.8%
• Earnings per share is expected to be in the range of Rs 106.85 and Rs 107.06; YoY growth of 2.2% to 2.4%

Outlook under IFRS

• Quarter ending March 31, 2010
• Consolidated revenues are expected to be in the range of $1,240 million and $1,250 million; YoY growth of 10.6% to 11.5%
• Consolidated earnings per American Depositary Share is expected to be $ 0.56; YoY growth nil Fiscal year ending March 31, 2010
• Consolidated revenues are expected to be in the range of $ 4.75 billion and $ 4.76 billion; YoY growth of 1.8% to 2.0%
• Consolidated earnings per American Depositary Share is expected to be $ 2.26; YoY growth of 0.4%

* Conversion 1 US$ = Rs 45.75 considered for quarter ending March 31, 2010.

Process innovation

During the third quarter, Infosys applied for 18 patent applications in India and the U.S. With this, Infosys has an aggregate of 219 patent applications (pending) in India and the U.S. and has been granted six patents by the United States Patent and Trademark Office.

Liquidity and capital expenditure

Cash and cash equivalents, including investments in liquid mutual funds, as on December 31, 2009 was Rs. 14,449 crore (Rs. 9,488 crore as on December 31, 2008).

"The rupee appreciated by 3.7% during the quarter," said V Balakrishnan, chief financial officer. "We maintained our margins while our cash and cash equivalents reached $3.1 billion."

Human resources

During the quarter, Infosys and its subsidiaries added 8,719 employees (gross). The net addition during the quarter was 4,429.

"Our strategy of investing in enhanced training during the downturn has enabled us to grow rapidly as the recovery begins," said T V Mohandas Pai, member of the board and head - HRD and Education & Research. "We have adequate capacity to meet the needs of the market place."

Awards and recognition

Oracle named Infosys a winner of a North America Oracle Titan Award during Oracle OpenWorld 2009, acknowledging it as one of its leading partners for outstanding solutions and business practices developed or delivered in fiscal 2009.

Infosys was named among leaders of Oracle service providers in a report by an independent research company.

It had the distinction of being in the 2009 list of the World's Most Admired Knowledge Enterprises, making it the sixth time for Infosys.

New markets

Infosys seeks to grow strong in markets which it has recently entered and continue the momentum from the previous quarters.

During the third quarter, it incorporated its wholly owned Brazilian subsidiary - Infosys Tecnologia Do Brasil Ltda. The first development centre of this subsidiary is in Belo Horizonte, the third largest metropolitan area in Brazil. This new centre will offer Infosys' complete suite of services to its Brazilian clients and Brazilian subsidiaries of global customers.

This quarter, Infosys also inaugurated its official premises in New Zealand, opening its first office in Wellington.

Infosys and its subsidiaries added 32 clients during Q3.