Bangalore, India-based Infosys saw its shares rise on the Bombay Stock Exchange after the company showed that it managed to maintain its margins despite recent pricing pressures. For the three months ended June 30, Infosys grew net profit 36% to $58.3m on revenue that increased 49% to $233.3m. At the end of the period, Infosys had increased its cash position to $381.1m from $235.5m in 2002. The company’s net profit margin was 25% compared to 24.5% in the previous quarter.
At the same time, the company upgraded its guidance for its full year ending March 31 2004, to between $966m and $982m. The company had previously expected revenue for the current year to grow between 25.5% and 27.7% to between $946m and $963m. Infosys now expects growth of between 28% and 30% in the year.
Infosys, like its peers, is coming under increasing margin pressure from a higher wage bill, the appreciation of the Indian rupee, and other lower cost offshore providers. One of the reasons for the sharp increase in profit this quarter was due to Infosys performing more of its projects offshore rather than onsite with the client, and CFO TV Mohandas Pai said: We have pro-actively hedged our net receivables to mitigate the impact of the rupee appreciation on our margins.
Infosys claims to have achieved most success during the quarter in the financial services sector, where it has won contracts with a global bank to implement an offshore strategy for its North American operations, a large UK bank, as well as developing a research portal for an investment bank. The company has also won a contract with a Fortune 500 automotive firm in the US, and a computer crash simulation project for a European automotive firm.
Source: Computerwire
