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April 13, 2004

Infosys revenue exceeds $1bn but slowdown expected

Offshore IT services provider Infosys Technologies Ltd broke the $1bn revenue mark in its financial year 2004, but expects a de-acceleration in 2005 as India's services market matures.

By CBR Staff Writer

Bangalore, India-based Infosys expects sales to grow between 30% to 31%, to between $1.38bn to $1.39bn in the year ending March 2005, after growing revenue by 41% to $1.06bn in the year to March 2004.

Infosys’ rapid growth in the last five years highlights the rise in use of offshore delivery models by Western companies looking to lower the cost of running legacy applications and building new ones. The company’s revenue was only $121m in 1999, but its growth has been largely organic and it is currently adding close to 3,000 new employees each quarter.

In the fourth quarter ending March 31, 2004, Infosys increased net profit 44.6% to $76.8m on revenue that grew 40.1% to $302.7m. Infosys also recruited 2,849 employees during the quarter, taking its total headcount to 25,364 at the end of last month. In the full-year period, the company’s net profit grew 38.7% to $270.3m.

Infosys’ ability to grow is being challenged by Western IT services providers and large end-users developing their own offshore delivery arms, which are competing against Infosys and its domestic rivals for local skills. However, Infosys is looking to grow its customer-facing sales operation to help it establish closer client relationships, and last week it announced $20m funding for a new 500-employee US consulting arm.

Infosys said it added 38 new clients during the most recent quarter, including a leading consumer electronics retailer in the US to build an order management and multi-channel integration system. It added that three of its Fortune 1,000 clients now provide Infosys with in excess of $50m in revenue.

This article is based on material originally published by ComputerWire

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