IT bellwether Infosys Technologies brought cheer to the woe-ridden software exports sector. Its working results for financial year 2007-08 were in line with the street expectations. It guided for better-than-expected earnings per share (EPS) for fiscal 2009.
Infosys reported 20.8% growth in its net profit, which crossed the $1-billion mark to record Rs 4,659 crore, including a tax write back of Rs 121 crore. The revenue grew by 20.1% to Rs 16,692 crore year-on-year.
Though the second largest software company gave y-o-y revenue growth guidance of 19.2% to 21.1% or in the range of Rs 19,894 crore to Rs 20,214 crore for fiscal 2009, it was the EPS outlook of Rs 92.32-93.92 or 16.3-18.3% growth that pushed the Infosys scrip up 6.22% or Rs 88.50 to Rs 1,510.40 on the NSE on Tuesday. For fiscal 2008, EPS excluding the tax write back of Rs 121 crore was Rs 79.39, a growth of 18.7% on year.
Admitting to the `short-term challenges’ that forced the company to give a flat sequential guidance for the first quarter of fiscal 2009?income is expected to be in the range of Rs 4,570 crore to Rs 4,582 crore against Q4 FY08 revenue of Rs 4,542 crore?Infosys CEO and managing director S Gopalakrishnan said: ?We as a company see significant growth opportunities in the medium to long term.?
In fact, Infosys said a survey of its 100 large clients showed that 76% of them have flat or snipped technology budgets for calendar 2008. ?Nearly 19% of them are seeing major decrease in the technology budgets of up to 10% (in calendar 2008), while others are seeing less than 10% (cut in budget) or flat. Discretionary spending will be under pressure,?? chief operating officer SD Shibulal said, adding, the remaining 24% customers were seeing an uptick in their tech budgets. Infosys added 40 clients in the January-March quarter, taking the number of active clients to 538.
Infosys is confident of bagging more work offshore despite economic turbulence in the US, which contributed 62% of its revenue.
?We believe that offshoring as a pie within the budget will increase in spite of softness in the budget,? chief financial officer V Balakrishnan said.
?Infosys results indicate decent IT services demand. Further, Infosys? normal conservative stance should mean that guidance builds in most of the possible negatives,? investment bank JP Morgan said in its post-earnings report.
Harit Shah of Angel Broking, said, ?Infosys? first quarter is going to be soft. It needs to accelerate revenue growth in the next three quarters.?
Dividend pours, at 665%
Infosys will give away a record Rs 1,600 crore as dividend to its shareholders. On Tuesday, the Infosys board recommended a final dividend of Rs 7.25 per share (145% on par value of Rs 5 per share) and a special dividend of Rs 20 per share (400%) for fiscal 2008. For the first half, Infosys had announced an interim dividend of Rs 6 per share (120%). On the whole, Infosys will pay a dividend of Rs 33.25 per share (665%). At the end of FY08, Infosys?cash balances stood at $2.1 billion.
?The net profit of $1 billion is a good milestone to celebrate,??chief financial officer V Balakrishnan said. Infosys has raised the dividend payout ratio to up to 30% of net profits effective from the current fiscal, against 20% earlier.
