Impacted by a rising and resilient rupee, IT bellwether — Infosys Technologies Limited, on Wednesday, announced that its revenue for the quarter ended June 2007 at Rs 3773 crore was almost the same as previous quarter (March 2007) and its net profit at Rs 1079 crore in June quarter was 5.8 per cent lower than the previous quarter.
But when compared with the June 2006 quarter, Infy’s June 2007 quarter result was encouraging as the YoY growth in net profit was 34.5 per cent and the growth in revenue was 25 per cent.
Reflecting disappointment at Infy’s results and scaling down of guidance for the full year, the Bombay 30-share Sensex ended the day down 99.26 point or 0.66 per cent at 14,910.62 with the meltdown in technology stocks triggered by Infosys Technologies, whose shares fell by 90.25 points or 4 per cent to 1929.70.
Infosys cut its full-year earnings forecast in rupee terms while, however, revising it upwards in dollars. The new team at Infosys helm, lead by CEO & Managing Director Kris Gopalakrishnan, could not have bargained for more daunting beginning.
Not in my control
Briefing reporters, Mr Gopalakrishnan described the challenging milieu arising out of appreciating rupee as “beyond our or my control. We have taken a Rs 287 crore hit during the quarter because of rupee impact.”
Taking into consideration prevailing scenario, the impact of the rupee for entire fiscal year has been put around Rs 1,000 crore.  Mr Gopalakrishnan, however, put on a brave front stating  “we have tried to bring the entire power of the company into play to minimise the impact” adding we have indeed shown resilience as “our volume growth has seen 6.9 per cent rise in dollar terms, better utilisation rate at 3 per cent and pricing at 1 per cent,” which have helped cushion the damage.
Stating that company’s net impact of appreciation of rupee on operating margins had been around 3 per cent, Chief Financial Officer V Balakrishnan said currently the company has around $925 million in kitty for currency hedging and if required it would be increased.”  The operating margin fell to 24.9 per cent in the June quarter from 27.8 per cent in the previous three months ended March.
Revised guidance
Keeping in mind the highly volatile and fluctuating rupee, the company has lowered its guidance to 14.5 per cent and 15.7 per cent growth in its revenues between Rs 3,952 crore and Rs 3,993 crore for September quarter and for entire fiscal 2008 to be in the range of Rs 16,238 crore and Rs 16,433 crore growing between 16.9 per cent and 18.3 per cent. 
During the quarter, Infosys and its subsidiaries added 35 new clients, saw gross addition of 7,004 employees (net 3,730) taking the total staff on rolls to 75,971 as on June 30, 2007. The quarter also saw Infosys file for six new patents in the US and India taking the aggregate number to 87 patents so far. The company also incurred a capital expenditure of Rs 336 crore as against Rs 193 crore in the previous year’s same period quarter.

CAN’T COMMENT ON RUMOURS
Kris deflects googly on Capgemini
Bangalore, DHNS: Despite repeated quizzing on whether Infosys Technologies held takeover parleys with Europe’s largest IT services giant, Capgemini, Chief Executive Officer & Managing Director S Gopalakrishan, who staved off queries with one could not comment on rumours left the issue to the realm  of conjecture. 
Observing that the company was indeed looking for acquisitions both on the domestic and global front, Mr Gopalakrishnan parried all questions about Capgemini development with “We cannot comment on rumours. So all I can say is that as part of the company’s strategy, we do look at acquisitions. It (the company to be acquired) has to meet our criteria. They want to be acquired. If they don’t agree, we can’t acquire.”
Further, Mr Gopalakrishnan said no company can comment on potential acquisition until and unless the deal is through. Speculation was rife last month that Infosys was set to buy out Capgemini.