BANGALORE (Thomson Financial) - India's Infosys Technologies Ltd said it
faces some "uncertainty" in the near future due to an almost one-month delay in
the release of IT budgets from its clients, but emphasised it expects a positive
trend in billing rates.
The Nasdaq-listed company also said it sees a big rise in offshore spending
from its clients going forward.
On average, growth global companies IT budgets' has slowed to 6-7 pct this
year from last year's 8 pct due to macroeconomic issues such as the slowing US
economy and subprime crisis, analysts said.
The demand for offshore services remains strong, and India's second-largest
software exporter expects this demand to increase in the coming years, said
Ashok Vemuri, senior vice-president and head of Infosys' banking and capital
markets division.
"The market for offshore IT spending is estimated to be 200220 bln usd, and
Indian vendors have so far managed to nibble less than 10 pct," said R Ravi, an
analyst at Karvy Stock Broking.
Global technology services' spending is roughly estimated to be at 1 trln
usd annually. Even if only one fifth goes offshore, it translates to a market of
200 bln usd, analysts said.
Indian vendors have barely tapped the available opportunity, so it should
not be difficult to grow the offshore market by 25-30 pct per year in US dollar
terms over the next couple of years, Ravi added.
Infosys said some 62.3 pct of its revenue came from North America quarter to
end-December. It is targeting Europe, Australia, Japan, Latin America, India and
China and new services such media & entertainment and transport & logistics for
future growth, chief financial officer V Balakrishnan told Thomson Financial
News.
Looking ahead, Balakrishnan said the company will focus on smaller
acquisitions of 100-200 mln usd but pointed out Infosys is also capable of
making big acquisitions.
Last year, the company bought Royal Philips Electronics NV's finance and
accounting business process outsourcing unit for 28 mln usd and was rumoured to
be interested in French IT services company Capgemini and the UK's Sage Group
PLC.
For the quarter to end-December, Infosys' net profit rose to 12.31 bln
rupees from 9.83 bln 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 IT company's shares closed down 1.38 pct at 1,580.10 rupees on the
Bombay Stock Exchange.
kapil.bhatnagar@thomson.com; TFN.newsdesk@thomson.com
kkb/tsm/ms1
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