Infosys net rises 17% in Q1, guidance lowered for year

Font Size

Print

Feedback

Email

Discuss

Related Articles

Govt may help Satyam raise financingMegasoft: no material impactIT caught in slowdown web

New Delhi: India’s second largest software firm, Infosys Technologies, beat market expectations and its own guidance and reported a 17.3% rise in its first quarter net profit at Rs 1,527 crore. But it still budgeted for a revenue decline of 1.9% to 0.1% in the current quarter.S Balakrishnan, chief financial officer of Infosys, told FE, “While the green shoots of recovery are visible at the macro level, they are still to surface at the micro level. There continues to be a lot of uncertainty in the environment and we want to be cautious in our approach.”

Infosys, which sets the ball rolling for the IT sector's earning season, continues to remain cautious and expects recovery in technology spending only by mid-2010. It tempered expectations with a revised earnings guidance for fiscal 2010, setting a range of Rs 21,416 crore to Rs 21,747 crore, reflecting a year-on-year decline of 1.3% to a growth of 0.3% in earnings. This is lower than the revenue growth of between 1.7% and 5.7% projected in April.

For the next quarter, or July-September 2009, the company expects revenues in the range of Rs 5,318 crore and Rs 5,413 crore, a decline of 1.9% to 0.1%. “We believe that in the short term the global economic environment will continue to be challenging,” said S Gopalakrishnan, chief executive officer & managing director, Infosys, though he conceded that there have been some visible signs of improvement in the business scenario. “We have been oscillating between hope and despair, and (such) volatility affects sentiment,” explained Infosys chief operating officer D Shibulal.

Despite the conservative outlook for the year, the market was happy with the results. “The results have been much above market expectations and it is quite likely that the company will surpass its guidance in the next quarter, too,” said an IT analyst with IIFL. The Infosys stock was up 2.97% to close at Rs 1,726.50 on the Bombay Stock Exchange (BSE). Other IT stocks like TCS, Wipro and HCL, too, moved up and the IT index was up by 2.17% while the broader market fell 1.84%.