Infosys Q2 net up 7.5% at Rs 1,540 cr

Software major Infosys Technologies reported 7.54 per cent rise in consolidated net profit after tax at Rs 1,540 crore (Rs 15.4 billion) for the quarter ended September 30, 2009.

The software firm had a net profit of Rs 1,432 crore (Rs 14.32 billion) in the second quarter of the previous fiscal, Infosys said in a filing to the Bombay Stock Exchange.

"In the second quarter, the business climate has improved," Infosys CEO and managing director S Gopalakrishnan said.

Total income stood at Rs 5,821 crore (Rs 58.21 billion), showing an over six per cent rise, at the end of the September quarter of the current fiscal.

The board declared an interim dividend of 200 per cent at the rate of Rs 10 a share.

The company added 35 new clients during the quarter.

"Clients are now looking to invest in a few strategic initiatives and relationships to maximise value from opportunities when the economic downturn ends," he added.

For the half year ended September 30, the net profit rose by over 12 per cent to Rs 3,067 crore (Rs 30.67 billion).

Infosys chief financial officer V Balakrishnan said, the global currency market continue to be extremely volatile, even though we have seen some stability in the rupee against the US dollar this quarter.

Highlights

• Consolidated results for the quarter ended September 30, 2009
• Income was Rs 5,585 crore (Rs 55.85 biillion) for the quarter ended September 30, 2009; YoY growth was 3.1 per cent
• Net profit after tax was Rs 1,540 crore (Rs 15.4 billion) for the quarter ended September 30, 2009; YoY growth was 7.5 per cent.
• Earnings per share increased to Rs. 26.86 from Rs. 25.02 in the corresponding quarter of the previous year; YoY growth was 7.4 per cent
• Declared an Interim dividend of Rs. 10 per share which is 200% on par value of Rs. 5 per share ( same as previous year)

Infy hired 6,069 employees in Q2

During the quarter, Infosys and its subsidiaries added 6,069 employees (gross). The net addition during the quarter was 1,548.

"In response to the economic crisis, we had stepped up our investment in training. This has made us more competitive in fulfilling client needs today," said T. V. Mohandas Pai, Member of the Board and head - HRD and education & research. "We have successfully completed the implementation of iRACE, our program for growth-focused career architecture across the company, thus completely transforming our people strategy."

Overseas markets:

Infosys said it was strengthening its presence across the globe, adding its focus particularly has been on powerful emerging markets such as Mexico, Brazil, China, and India.

In a span of two years, Infosys has established multiple services in Mexico, including IT, BPO and consulting services, and core banking solutions for its global clients and those across Latin America.

Its Mexico centre continues to provide near-shore value proposition to its US clients in

Application Development and Maintenance, Enterprise Solutions, and Independent Validation Services.

In addition, it has partnered with the country's government and universities to design and roll out a unique finishing school program for engineering graduates.

Infosys is setting up its first Development Center in Brazil. This is its second Latin America (Latam) operation, aimed at serving clients which are headquartered either in Brazil, or outside.

Through operations in Brazil, Infosys can manage the Portuguese needs of Brazilian clients.

Infosys further said its China Development Center has grown in the last one year to deliver BPO and IT services to clients in the US, Europe, and Asia.

In India, Infosys continues the impetus of the previous quarters.

"In the second quarter, the business climate has improved," said Gopalakrishnan, adding, "Clients are now looking to invest in a few strategic initiatives and relationships to maximise value from opportunities when the economic downturn ends."

Business outlook

The company's outlook (consolidated) for the quarter ending December 31, 2009 and for the fiscal year ending March 31, 2010, under Indian GAAP and International Financial Reporting Standards (IFRS) is as follows:

Outlook under Indian GAAP - consolidated*

Quarter ending December 31, 2009

• Income is expected to be in the range of Rs. 5,429 crore (Rs 54.29 billion) and Rs. 5,476 crore (Rs 54.76 billion); YoY decline of 6.2 to 5.4 per cent
• Earnings per share is expected to be in the range of Rs. 23.35 and Rs. 23.56; YoY decline of 18.5 to 17.8 per cent

Fiscal year ending March 31, 2010

• Income is expected to be in the range of Rs 21,961 crore (Rs 219.61 billion) and Rs. 22,055 crore (Rs 220.55 billion); YoY growth of 1.2 to 1.7 per cent
• Earnings per share is expected to be in the range of Rs 99.60 and Rs 100.00; YoY decline of 4.8 to 4.4 per cent

Conversion 1 US$ = Rs. 47.00 considered for quarters ending December 31, 2009 and March 31

Outlook under IFRS#

Quarter ending December 31, 2009

• Consolidated revenues are expected to be in the range of $ 1,155 million and $ 1,165 million; YoY decline of 1.4 to 0.5 per cent
• Consolidated earnings per American Depositary Share are expected to be $ 0.50; YoY decline of 13.8 per cent

Fiscal year ending March 31, 2010

• Consolidated revenues are expected to be in the range of $ 4.60 billion and $ 4.62 billion;
• YoY decline of 1.3 to 1.0 per cent
• Consolidated earnings per American Depositary Share are expected to be in the range of $2.09 and $2.10; YoY decline of 7.1 to 6.7 per cent.