Infosys Technologies took the lid off the annual earnings season on Tuesday, reporting a 4% growth in yearly net profit for 2009-10, energised by a revival in technology demand in Europe and the US. It also gave stronger revenue guidance in dollar terms, projecting a 16-18% growth.

The company?s net profit for the full year moved up to Rs 6,219 crore while its top line surged north by 4.8% to Rs 22,742 crore, prompting CEO Kris Gopalakrishnan to comment that the IT sector is on a sure-footed recovery curve. Diluted EPS for the fiscal stood at Rs 108.90 a share.

The discretionary spend is thawing, large deals are back and deal conversion rates have improved, the company said, allaying concerns on the business environment. Infosys shares on the BSE rose 3.69% to close at Rs 2,782.35.

Though Infosys guided for dollar revenues of $5.57-$5.67 billion (16-18% growth) for the current fiscal, in rupee terms it gave a muted guidance of 9-11%, projecting revenues between Rs 24,796 crore and

Rs 25,239 crore?after the company factored in rupee appreciation of 6.2%. It based its calculation on a rupee-dollar exchange rate of Rs 44.50.

EPS growth was seen at 4.3-8.6% in dollar terms while in rupee terms it guided between Rs 106.82 and

Rs 111.28 a share, significantly below what the street expected. The firm announced a wage hike of 14-17% in India and 2-3% onshore. It expects to hire 30,000 in FY11.

For Q4, the net profit in the three months through March dropped to Rs 1,600 crore from Rs 1,615 crore in the same quarter the previous year. In the previous quarter, net profit stood at Rs 1,559 crore. Sequentially, the net profit moved up by 2.6% while the top line grew by 3.5%. Dollar revenues grew 5.2% sequentially, in line with what FE reported on Tuesday.

Infosys? net profit for the fourth quarter includes Rs 48 crore from the sale of 60% holding in OnMobile. Infosys had invested $2 million in the firm.

The CEO said growth was broad-based, across verticals and geographies. On a quarter-on-quarter basis, revenues from North America grew by 4.4% and from Europe, by 7.9%. BFSI grew by 5.9% and manufacturing, a vertical crippled by the global recession, by 10.2%. In service lines, growth came mostly from consulting and enterprise solutions.

?There were four transformational deals, out of which two are $50 million-plus accounts. We won five large deals and two of them are more than $150 million,? Gopalakrishnan said.

The economic environment globally, he warned, was still uncertain and challenging ? unemployment is high. ?Companies are, therefore, taking short-term decisions. Nevertheless, they are investing to emerge stronger out of the downturn,? he said.

Infosys added 47 clients during the March quarter ? one of the highest additions in recent times. The US and BFSI are expected to drive the firm?s growth even in the future?Infosys is banking on continued investments from bank restructuring as distressed financial services companies shed more assets.

There may not be an immediate windfall in IT budgets. Executives said they expected budgets to be flat to slightly up. Earlier, market research firm Gartner noted that worldwide IT spending is forecast to reach $3.4 trillion in 2010, a 5.3% increase from IT spending of $3.2 trillion in 2009.

However, a firming rupee on the back of rising foreign investment into India may keep earnings growth muted for outsourcers, and Infosys expects its profit margins to take a hit this year.

?Currency volatility continues to be a concern for the industry,? said chief financial officer V Balakrishnan. Infosys COO Shibulal said he expected profit margins this fiscal to drop 150 basis points, mainly on a firmer rupee. The company hired 27,639 employees in FY10 and has made 19,000 campus offers for FY11. Infosys has recommended a final dividend of Rs15 per equity share.

India Infoline analyst Rajeev Mehta told FE that the earnings numbers are pretty robust. ?I?m impressed. Infosys has done extremely well. The dollar guidance of 16-18% is quite good for the sector. I predict a similarly good result for Wipro and TCS as well,? he said.

Karthik Ananth, director of market expansion at Zinnov Management Consulting, while commenting on the hiring trend, said, ?Hiring will not, however, mean sky-high packages, companies are still under margin pressure, though pricing pressures have eased from the last 18 months. Companies will look to contain the costs, and hiring of freshers will help broaden the base of the pyramid and bring down the overall cost of service delivery to clients.?