Infosys, on Thursday, reported its revenue crossing the $1 billion mark, for the quarter ending September 30, 2007. The company’s income stood at Rs 4,106 crore for this quarter up 19 per cent from Rs 3,451 same quarter previous year. Also, the net profit at Rs 1,100 crore was 18 per cent more than Rs 929 crore last year.

But good result failed to cheer the stock markets as analysts were expecting more. Shares of the company dropped by Rs 148.55 to Rs 1,976.00 reflecting investors’ disappointment with the earnings. It also had a cascading effect on other IT shares, resulting in a hefty fall of 282.28 points or 5.59 per cent in the BSE IT Index. The investors also ignored the good news that the company has projected under the US GAAP 34.5 to 35 per cent increase in revenue for the year ending March 31, 2008.

Announcing the result here on Thursday, Infosys CEO & MD S Gopalakrishnan, said, “India still remains the favourable destination for offshoring and BPO services. We have added about 48 new clients during the quarter and are pursuing 14 deals of over $1 billion, multi year contracts. Our Europe business has gone up to 27.4 per cent up from 25.6 per cent last year.”

Speaking about other sectors, Mr Gopalakrishnan said, “Apart from the financial services, manufacturing, energy, utilities, retail are doing well. Our new business model contributes about 24 per cent of our revenues, helping us combat the impact of the rupee appreciation. Also the rise of the consultation and packaging implementation business is supporting our growth.”

Increased hedging
To safeguard itself from the impact of rupee, the company has increased its hedging from Rs 924 million to Rs 1.4 billion. Infosys Chief Financial Officer V Balakrishnan said, “Our operating margins improved during the quarter despite the appreciating rupee. We are proactively hedging our currency exposure to mitigate this impact and our hedging position as of September 30, 2007 was $1.4 billion.” Infosys has also increased its pricing for the quarter by 1.9 per cent. Also the earnings per share has increased to Rs 19.26 from Rs 16.75 last year, a 15 per cent rise. At the current growth rate, the earnings per share for March 31, 2008 is projected at Rs 79.49-Rs 79.99, the company informed. 

The company had opened its first Latin American subsidiary in Monterrey, Mexico. In the energy sector, one of the largest drilling contractors in the Middle East has signed up Infosys to conduct a scoping exercise for SAP based business intelligence implementation, the company said.

Infosys and subsidiaries saw a gross addition of 8,543 employees (net 4,530) for the quarter. The total number now stood at 80,501 as on September 30, 2007. It also announced a dividend of Rs 6 per share compared to Rs 5 for the corresponding period last year.