Striking a cautious note, Infosys Technologies' Chairman, N R Narayana Murthy, has said early signs of the global economy emerging from recession cannot be taken for granted.
"Global output contracted nearly one per cent in 2009. Going ahead, the global output is expected to grow by more than four per cent. Nine months since the upturn, the global GDP seems to be growing at around four per cent, though unemployment across the world is projected to sustain at a high of nine per cent. Recovery after this kind of crisis may be slow and weak," he said at the 29th annual general meeting of India's second-largest software services exporter on Wednesday.
He said Indian outsourcing companies could not afford to ignore threats from highly leveraged economies. "Under-employment in emerging economies continued to remain much higher in 2009," Murthy said, adding he looks ahead with guarded optimism.
Murthy said 70 per cent of the world's growth over the next few years was estimated to come from emerging markets, which now host 21,500 multinational corporations. He said companies with lower complexity grow faster than their average competitors. "Tomorrow's enterprises need to become faster by reducing complexity."
Chief Operating Officer and Director Shibulal said 2010 was one of the toughest financial years for the industry. "But through the global delivery model and our enhanced focus on sustaining our engagement with clients, stakeholders, investors and employees, we ended up with one per cent increase in margins. This was against a three per cent fall we predicted last year," he said.
Infosys, which posted revenues of $4.8 billion (Rs 22,500 crore) in 2009-10, counts Goldman Sachs, BT Group and British Petroleum among its
clients. In April, the company forecast a 16-18 per cent rise in revenue for the year ending March 2011, pointing to a recovery for the sector. Its expectation for the current financial year is in the range of Rs 24,800-25,250 crore (Rs 248- 252.5 billion).
An appreciating rupee, a sliding euro and the European debt crisis continued to be pain-points for the $60-billion (Rs 2.8 lakh crore) information technology exports sector in 2010. Infosys has been able to tackle the impact of currency fluctuations through effective forex management on the cross-currency and rupee-dollar front, enhanced focus on risk management, and stringent cost control measures, according to Chief Financial Officer V Balakrishnan.
It added 141 new clients and made a gross addition of 27,639 employees (a net of 8,946 employees) in 2009-10. The number of million-dollar clients grew to 338 from 327 in 2009. The top ten clients grew three-five per cent.
The company had a cash balance of $3.5 billion (Rs 16,400 crore), 28 per cent of it in fixed assets, at the end of March. It filed 31 patents in 2009-10. A total of 224 patent applications are pending with the US Patent Office, while nine patents have been granted so far.
