Reuters | Yahoo |Tue, Jul 13 2010 | 09:24 AM
Infosys Technologies Ltd reported a surprise 2.6 percent drop in quarterly profit but raised its full-year revenue forecast on hopes of strong outsourcing demand from overseas clients. India’s No. 2 outsourcer, a trendsetter in the country’s showpiece software services sector, added 1,026 new staff in April-June, its slowest pace of addition in four quarters, sending its shares 2 percent lower. The company, which counts Goldman Sachs, BT Group and BP among its more than 550 customers, forecast its 2010/11 dollar revenue to rise 19 percent to 21 percent, higher than 16-18 percent projected in April. “While the global economic environment remains uncertain, we continue to see greater demand for services from our clients,” said chief executive S. Gopalakrishnan. “The challenge for the industry is to enhance the investment to grow the business, given the uncertainty in the environment.”
Infosys, known for its conservative outlook, has raised its full-year revenue growth forecast in dollar terms in the last three consecutive quarters. The company expects earnings per American depositary share to rise 5.2 percent to 9.6 percent for the year, up from its previous forecast of 4.3 percent to 8.6 percent. Infosys shares, valued at about $36 billion, traded down 2.1 percent at 2,835 rupees after the results announcement. The main Mumbai market was down 0.1 percent. On Monday, the shares had hit a record high for the second session in a row. Infosys and local rivals Tata Consultancy Services and Wipro are boosting hiring and have raised salaries by 10 to 20 percent on average to keep staff from being poached by global rivals in a strong market. Nasdaq-listed Infosys said net profit in its fiscal first quarter ended June 30 fell to 14.9 billion rupees ($318 million) from 15.3 billion rupees a year ago. A Reuters poll of brokerages had forecast a profit of 15.56 billion rupees. Infosys reported under the International Financial Reporting Standards for the second successive quarter. India’s export-driven software services firms face uncertainty on orders from Europe, the second-biggest market for the industry after the United States. Growing competition from IBM, Accenture and Hewlett-Packard also pose a risk to the sector, which manages complex computer networks and maintains technology operations for Fortune 500 customers.
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