Infosys Posts Revenue and Profit Growth, Reflecting Recovery

Infosys Technologies, India's second-largest outsourcer, reported quarterly rises in profit and revenue in dollar terms, showing a steady recovery has begun for Indian outsourcers.

Revenue for the quarter ended March 31 was US$1.3 billion, up 15.6 percent from the same quarter a year ago, the company said on Tuesday. Net profit grew by 8.7 percent to $349 million.

The results for the quarter are in accordance with International Financial Reporting Standards (IFRS).

Infosys has forecast that revenue for its fiscal year ending March 31 next year will be around $5.6 billion, which would mark year-on-year growth of about 17 percent.

Infosys also reported annual results, with revenue for its last fiscal year of $4.8 billion, up 3 percent, as it faced the impact of the recession on the IT services business. The revenue for the year was, however, higher than earlier forecast by the company.

Infosys continues to describe the economic environment as challenging but said in a statement that businesses are "investing in growth for building a better future".

Currency volatility continues to be a concern, the company said. The Indian rupee has been gaining against the U.S. dollar, thus reducing the number of rupees available to Indian outsourcers for spending on staff and facilities at home in India.

Infosys' revenue growth in rupee terms was lower at 5.5 percent, and net profit fell by 1 percent in the quarter ended March 31.

Infosys and other Indian outsourcers have started hiring staff again in large numbers since January this year, anticipating an improvement in business. Infosys added over 3,900 staff in its most recent quarter, and had nearly 114,000 employees at the end of last month.

Research firms have forecast a growth in IT spending this year, which is expected to benefit Indian outsourcers. Gartner this week said worldwide IT spending is forecast to reach $3.4 trillion in 2010, a 5.3 percent increase from 2009. Global spending in the IT services industry is forecast to reach $821 billion in 2010, up 5.7 percent from 2009, Gartner said.

Infosys added 47 new clients in the quarter. About 66 percent of its revenue came from North America, followed by 22.5 percent from Europe.

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