(Adds COO quote, analysts' comments; stock price)
BANGALORE (Thomson Financial) - Infosys Technologies Ltd reported a 25.2 pct
year-on-year rise in its third-quarter net profit, beating market expectations,
helped by a strong order book and growth from its financial services vertical.
However, India's second largest software exporter said the global business
environment continues to be "challenging".
"We believe that the IT spending environment will be favourable to large
offshore players like us, even though the macro-environment is challenging,"
Ashok Vemuri, senior vice president and head of Banking and Capital Markets
division, said.
The Nasdaq-listed company also increased its full-year revenue estimates in
dollar terms by one notch to 4.17-4.18 bln usd.
For the quarter to end-December, Infosys' net profit rose to 12.31 bln
Indian rupees from 9.83 bln rupees last year and 11.0 bln rupees in the
preceding quarter. Revenues grew to 42.71 bln rupees from 36.55 bln last year.
The company also said its EBITDA margins improved by 130 basis points,
quarter-on-quarter.
Analysts polled by Thomson Financial had forecast a third-quarter net profit
of about 11.9 bln rupees on revenue of 43.34 bln rupees.
"Even after knocking out the tax benefits the company enjoyed this quarter,
its results, at the pretax level, have improved and is line with our
expectations," Ravi R, IT analyst at Karvy Securities said.
According to Ravi, the company has performed well in all the parameters,
especially in terms of people and client addition, costs in check and margin
improvement, among others.
Infosys expects its full-year earnings per share to rise by 17.2 pct to
81.07 rupees and has also marginally raised its revenue estimates to
166.27-166.51 bln rupees from 165.88-166.48 bln rupees previously.
The company added net 8,100 employees and 47 clients during the quarter. It
won repeat business from clients and its cash and cash equivalents crossed 2 bln
usd as on Dec 31.
"We saw strong growth in Europe during the quarter. The pricing environment
continues to be stable with an upward bias," chief operating officer SD Shibulal
said.
"We increased the depth of client engagements and our top ten customers
showed double-digit revenue growth," he added.
Infosys was the worst performer on India's benchmark BSE index after falling
21 pct in 2007 as the rupee posted its biggest gain in more than three decades
and investors grew concerned about a US economy slowdown.
Looking ahead, Harshad Deshpande, an analyst at Indian brokerage firm
Religare Securities, said he expects a horizontal movement in the stock price of
Infosys in the near future as there is no positive news coming from the company.
The rupee ended at 39.4 against the dollar on Dec 31, up a 0.8 pct on the
rate at end-September, making the movement against the dollar relatively stable.
The stock prices for Infosys are near its lowest valuations since 2003 and
are already factoring in the worst, Deshpande added.
At 11.30 am (6.00 am GMT), shares were up 0.27 pct at 1606.50 rupees, while
the overall market as indicated from BSE sensitive index was up 124.3 points at
20,706.
TFN.newsdesk@thomson.com
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