Infosys on Tuesday posted a 2.42 per cent drop in first quarter net profit to Rs 1,488 crore on volatile currency and high staff cost, but raised full-year revenue growth forecast by three percentage points to up to 21 percent.
The company had a net profit of Rs 1,525 crore during the April-June quarter of the previous fiscal (2009-10).
"The yearly guidance has been revised to 19-21 percent and there is cautious optimism. The
caution is coming from the concerns about Europe and currency momentum.
But otherwise it is a a good quarter," Infosys CEO and MD S Gopalakrishnan said.
Earlier, the company's guidance was for 16-18 percent revenue growth in the current fiscal.
Shares of the company plunged following the announcement of the result and were trading
3.49 per cent down at Rs 2794.05 at 1515 hours.
The Bangalore-based company expects its consolidated revenues to be in the range of USD
5.72 billion to USD 5.81 billion for the fiscal year ending March 31, 2011.
For the second quarter ending September 30, 2010, the company said its consolidated
revenues are expected to be in the range of USD 1.41 billion to USD 1.42 billion, which translates into a growth rate of 22.4 per cent to 23.7 percent.
"While the global economic environment remains uncertain, we continue to see greater
demand for services from our clients.
The challenge for the industry is to enhance the investment to grow the business, given the
uncertainty in the environment," Gopalakrishnan added.
Analysts said Infosys earnings were hit by volatility in currency.
Infosys Technologies, India's second-largest software exporter by sales, sets not only the mood of the sector, but the entire market sentiment.
The Bangalore-based software major's consolidated revenue rose 13.26 per cent to Rs 6,198 crore in the quarter under review against Rs 5,472 crore over the year-ago period.
While North America contributed 67.3 per cent to the company's revenues in the said quarter, Europe accounted for 20.3 per cent of the revenues.
Under the International Financial Regulatory System (IFRS), net profit grew 4.2 per cent year -on-year to USD 326 million from USD 313 million. Consolidated revenue was up 21 per cent to USD 1.35 billion for the quarter ended June 30, 2010, from USD 1.12 billion in the year ago period.
Cash and cash equivalent on June 30, 2010, stood at Rs 16,005 crore in April-June quarter from Rs 12,030 crore in the same period last year. "The volatile currency environment is a concern for the industry.
Our flexible financial and operating model enables us to prioritise our investment and focus on high quality growth even in this tough environment," Infosys CFO V Balakrishnan said.
Infosys and its subsidiaries had a net addition of 1,026 employees for the quarter ended June 30, 2010, taking the total headcount to 1,14,822 employees.
"With the market opening up, attrition has increased in the quarter. We have taken several
steps to reduce attrition, including a compensation hike and enhancing lateral hiring," said the company's member of the board and head (HRD education and research) TV Mohandas Pai.
Further, the company which counts Goldman Sachs, BT Group and BP Plc among its clients, said it has added 38 clients during the quarter.