Infosys reports first drop in its Y-o-Y net profit

But result is better than the estimates

Infosys reports first drop in its Y-o-Y net profit

Infosys Technologies Chief Executive Officer S. Gopalakrishnan. File photo/ReutersThe December quarter profit was, however, 2.7 per cent higher over the September 2009 quarter. Total income of the company in the December quarter at Rs 5,741 crore from software services, products and business process managment was almost flat when compared with the same quarter last year.

Infosys’ result, however, was better than the market expectations which anticipated higher drop in sales and profits.  “Global economic recovery seems to be led by the US and the financial services,” said Infosys Chief Executive Officer and Managing Director S Gopalakrishnan, adding “Even though IT budgets are expected to be flat in 2010, offshore outsourcing is expected to benefit from this recovery.” “Clearly the worst seems to be behind us. Clients have expressed greater confidence and they are more willing to make big decisions. Large deals are back in the play,” Kris said. At the end of December 2009 Infosys’s cash and cash equivalents, including investments in liquid mutual funds, was at Rs 14,449 crore against Rs 9,488 crore on the same date last year. Infosys CFO V balakrishnan said “Though the rupee appreciated by 3.7 per cent during the quarter we maintained our margins while our cash and cash equivalents reached US$3.1 billion.”

Infosys and its subsidiaries added 8,719 employees (gross) and the net addition during the quarter was 4,429. “Our strategy of investing in enhanced training during the downturn has enabled us to grow rapidly as the recovery begins,” said Member of the Board and Head–HRD and Education & Research T V Mohandas Pai. Infosys and its subsidaries added 32 new clients in the quarter.

Acquistions

During the third quarter, Infosys BPO acquired US-based insurance and retirement business process solutions provider, McCamish Systems LLC. Infosys BPO signed an agreement to provide Finance and Accounting (F&A) services to a healthcare and consumer lifestyle major in Brazil. Going forward Infosys, projected an average revenue guidance in the range of  Rs 5,675 crore to Rs 5,721 crore for the March 2010 quarter which will be a marginal growth of  0.7 per cent to 1.5 per cent YoY. While the consolidated income for the year 2009-10 is expected to be in the range of Rs 22,473 crore and Rs 22,519 crore which will be an increase of 3.6 per cent to 3.8 per cent Y-o-Y.   Infosys share price rose jumped up 4 per cent to Rs 2,588 in the BSE at the end of the trading on Tuesday.

Employee monitoring

Meanwhile, the firm asserted that it will take tough decision against the employees who violate the code of conduct.  The move of the company comes in a context as its employees where allegedly involved in three criminal cases in the last couple of months. Pai said “When you have a hundred thousand employees, we are a global family and it is very difficult to monitor each employees personal life. However, we understand that some instance and actions of some our employees  have crerated problems. We will take strict actions against such persons and behaviour.”  Answering to a query on the flood rehabilitaion, he said that Infosys has identified an NGO for the construction of houses and it plans to build 3,000 houses mainly in Gulbarga and Bakalkot districts. “Government wanted to shift people from the locality and to build the houses in safer regions.

However people want to rebuild their houses and are not ready to relocate. This is a major issue and we are in consultaion with the goveranment.

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