Infosys Technologies Ltd, India's second largest software exporter, reported net profits of Rs 983 crore for the quarter ending December, a strong 51.5 per cent annual growth, maintained operating margins through better utilisation of staff and marginally cutting office expenses, despite an appreciating rupee. Revenues for the quarter stood at Rs 3,655 crore.
Indian software vendors are witnessing robust demand for their services in the US and Europe as global corporations such as General Electric and ABN Amro increasingly outsource technology maintenance and application development work offshore to cost-competitive countries. Analysts had expressed concerns on software company results over a stronger rupee against the US dollar and a rise in salaries for technology workers.
"Infosys has managed to maintain margins by curbing office expenses and increasing (worker) utilisation," said Harmendra Gandhi, technology analyst with Brics Securities, which expected Infosys to clock net profits of Rs 970 crore. Other brokerages such as UBS had expected Rs 950 crore bottomline. In the July-September quarter, the Bangalore headquartered company had net profits of Rs 929 crore.
The rupee has appreciated by 3.6 per cent against the dollar in the three months ending December. Operating margins of Infosys increased by 0.5 per cent to 28.8 per cent and employee utilisation rose half a percentage point to 75.8 per cent, compared to quarter ended September. General and administration expenses, or costs of running its offices, showed a dip of 1 per cent over the previous quarter.
"The rupee appreciated against all major currencies during the quarter, impacting our operating margins by 200 basis points," says V Balakrishnan, chief financial officer of Infosys, said in a statement. "Despite this, we have maintained our margins."
Indian stock markets, which have been falling since Monday, fell further marginally on Thursday morning. At 10.50 am, the Bombay Stock Exchange's Sensex fell 10 points or 0.07 percent to 13,352. The Infosys stock, which has a 11.07 percent weightage on the index, fell Rs 50 to Rs 2,118 in morning trades.