Infosys Technologies Limited announced the Q1 results in Bangalore on Wednesday.
- Q1 revenues grew by 25.1% year on year; sequential growth flat
- Dollar guidance revised upwards; Rupee guidance revised downwards, reflecting appreciating rupee
Highlights
Consolidated results for the quarter ended June 30, 2007
Income was Rs. 3,773 crore for the first quarter ended June 30, 2007; YoY growth was 25.1%
Net profit after tax* was Rs. 1,079 crore for the quarter ended June 30, 2007; YoY growth was 34.5%
Earnings per share* increased to Rs. 18.89 from Rs. 14.36 for the corresponding quarter in the previous year; YoY growth was 31.5%
* The net profit for the quarter ended June 30, 2007 includes a reversal of tax provisions amounting to Rs.
51 crore. Excluding this reversal, the earnings per share for the quarter would have been Rs. 18.00 resulting
in a YoY growth of 25.3%.
Others
35 new clients were added during the quarter by Infosys and subsidiaries
Gross addition of 7,004 employees (net 3,730) for the quarter by Infosys and subsidiaries
75,971 employees as on June 30, 2007 for Infosys and subsidiaries
"As clients recognise the strategic imperative of global sourcing in an increasingly flat business world, the demand for large end-to-end players like Infosys continues to be strong," said S Gopalakrishnan, CEO and Managing Director. "We continue to focus on being a partner of choice to our customers."
Business outlook
The company's outlook (consolidated) for the quarter ending September 30, 2007 and the fiscal year ending March 31, 2008, under Indian GAAP and US GAAP, is as follows:
Outlook under Indian GAAP - consolidated
Quarter ending September 30, 2007**
Income is expected to be in the range of Rs. 3,952 crore and Rs. 3,993 crore; YoY growth of 14.5% 15.7%
Earnings per share is expected to be Rs. 18.88 ; YoY growth of 12.7%
Fiscal year ending March 31, 2008**
Income is expected to be in the range of Rs. 16,238 crore and Rs. 16,433 crore; YoY growth of 16.9% 18.3%
Earnings per share*** are expected to be between Rs. 78.20 and Rs. 79.00; YoY growth of 13.0% 14.1%
** Conversion 1 US$ = Rs. 40.58
*** Including tax reversal of Rs. 51 crore and Rs. 124 crore in fiscal 2008 and 2007 respectively. Excluding the tax reversal the Earnings per share are expected to be between Rs. 77.31 and Rs. 78.11; YoY growth of 15.6% to 16.8%
Outlook under US GAAP
Quarter ending September 30, 2007
Consolidated revenues are expected to be in the range of $ 974 million and $ 984 million; YoY growth of 30.6%-31.9%
Consolidated earnings per American Depositary Share are expected to be $ 0.46; YoY growth of 27.8%
Fiscal year ending March 31, 2008
Consolidated revenues are expected to be in the range of $ 4.00 billion and $ 4.05 billion; YoY growth of 29%-31%
Consolidated earnings per American Depositary Share*** are expected to be between $ 1.92 and $1.94; YoY growth of 25.5%-26.8%
*** Including tax reversal of US$ 13 mn and US$ 29 mn in fiscal 2008 and 2007 respectively. Excluding the tax reversals theconsolidated Earnings per American Depositary Shares are expected to be between $ 1.90 to $ 1.92; YoY growth of 28.4% to 29.7%
Awards and recognitions
Sainsbury's, a leading UK food retailer with interests in financial services, selected Infosys as its IT Supplier of the Year for 2006. The Royal Bank of Scotland (RBS) named Infosys as its Best Technology Supplier for 2007. Sears Holdings, a leading US retailer, honoured Infosys with two Partner in Progress awards for 2006. DaimlerChrysler named Infosys its IPS (International Procurement Services) Supplier of the Year 2006 in the information technology category. Readers of Waters, a leading financial technology publication, identified Infosys as the Best Outsourcing Provider for 2007. An independent analyst named Infosys as a leader in global information technology infrastructure outsourcing.
"Our drive to achieve customer delight has met with success, with clients expressing their appreciation of our service quality and delivery excellence," said S D Shibulal, chief operating officer. "Deeper client engagement has resulted in clients other than the top ten growing sequentially by 9.3 per cent during this quarter."
Expansion of services and significant projects
Infosys saw increasing demand for its business solutions and strong growth in service lines such as consulting, engineering services and package implementation. 35 clients were added during the quarter.
Infosys Consulting Inc
Working in synergy with Infosys business units, Infosys Consulting partnered with global businesses to chart their IT strategy for market leadership and improve the alignment between business and IT in their organizations.
Finacle
At the Banker Technology Awards, Finacle, the universal banking solution from Infosys, received a 'Highly Commended' mention under the back office project category for retail banking. Finacle added four new clients, including Emirates Bank, which has selected Finacle core banking, Islamic banking, CRM and multi-channel alerts to completely revamp its technology infrastructure. During the quarter, 10 client projects went live on Finacle.
Infosys BPO
Infosys BPO demonstrated its growing capability to undertake highly complex, analytical projects from large global corporations. Infosys BPO's Knowledge Services are helping a Fortune 100 telecom solutions provider to enhance its competitiveness.
Process innovation
During the quarter, Infosys applied for 6 patents in the US and India. With this, Infosys has filed an aggregate of 87 patent applications in both countries.
Liquidity and capital expenditure
Cash and cash equivalents, including investments in liquid mutual funds, as on June 30, 2007 was Rs. 6,442 crore (Rs. 3,434 crore as on June 30, 2006). During the quarter, Infosys incurred capital expenditure of Rs. 336 crore (Rs. 193 crore for the quarter ending June 30, 2006). Operating cash flows during the quarter ended June 30, 2007 were Rs. 902 crore (Rs. 464 crore for the quarter ended June 30, 2006).
"The sharp appreciation of the rupee against all major currencies impacted our operating margins during the quarter," said V Balakrishnan, chief financial officer. "However, our robust and flexible operating and financial model enabled us to maintain our net margins while absorbing the impact of appreciating currency, higher wages and visa costs. Liquidity has been further strengthened with cash and cash equivalents reaching $1.6 billion."
