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Infy net profit up 70 per cent

Infotech bellwether sees income in 2007-08 climbing to Rs 17,308 crore, reports R Srikant.

business Updated: Sep 10, 2012 12:08 IST
R Srikant

Riding the wave in global outsourcing, Infosys Technologies crossed a record in revenues at $3.1 billion (Rs 13,893 crore) during 2006-07 and a notched a fantastic 70 per cent growth in quarterly profits at Rs 1,144 crore during the last quarter of the financial year.

On Friday, the information technology behemoth announced a net profit of Rs 3,850 crore for the year ended March 31, 2007, growing 56.6 per cent year on year, the sharp rupee appreciation notwithstanding.

In its guidance for 2007-08, Infosys has projected modest revenues of Rs 17,308 crore, an increase of 25 per cent from the previous year. The company usually issues conservative projections. For instance, in 2006-07 Infosys revised upwards its original guidance during the last three quarters. For the first quarter (April-June) of 2007-08, consolidated revenue is expected to be Rs 3, 913 crore, up 30 per cent year on year. Likewise, the earnings per share (EPS) for 2007-08 are expected to be Rs 81.58, 22 per cent higher than 2006-07.

The company's consolidated income for 2006-07 rose to Rs 13, 893 crore, posting an increase of 46 per cent over that of the previous year. Its income for the last quarter at Rs 3, 772 crore, notched year-on-year growth of 43. 8 per cent.

The IT bellwether declared a final dividend of Rs 6.50 per share, or 130 per cent on par value of Rs 5 per share, for 2006-07. With an interim dividend of Rs 5 per share, amounting to Rs 278 crore, the total dividend for the entire year would be Rs 11.50 per share, 230 per cent of the par value, with a payout of Rs 649 crore.

The company attributed its robust performance to a surge in outsourcing orders during the last three months. Besides, its client list grew with 34 new corporate clients, including firms in the retail, aerospace and oil industries. "Our revenues grew by around $ 1 billion this year. The global infotech services industry continues to show strong growth with exciting opportunities, and Infosys is well positioned to take advantage of this," Nandan Mohan Nilekani, CEO and managing director, announced at a news conference.

V Balakrishnan, Infosys CFO, said though the rupee appreciated by 1.9 per cent during the fiscal year, the impact was only 1 per cent on operating profit and marginal on net profit in the light of prudent forex hedging and higher non-operating income from investments in mutual funds and fixed deposits in banks. "The rupee appreciated from 45 to 43.10 (to a dollar) during the fiscal, with an overall impact of 300 basis points on our margins. Despite a 15 per cent increase in offshore wage compensation and 5-6 per cent in onsite compensation, we managed to cover the impact with improved utilisation rates and discreet hedging. Our robust financial model allows us to balance the investments required in the business and profitability while focusing on growth. Our liquidity position continues to be strong with cash and cash equivalents reaching $1.4 billion," he said.

TV Mohandas Pai, head (HRD and education and research), said, "We are making substantial investments in creating a scalable training engine in Mysore to support our future growth. By December 2007, we will have the capacity to train 13,500 employees at a time."