Infosys Technologies Ltd, India's second largest IT bellwether, has posted robust topline and bottomline growth for the first quarter (April-June) and revised its guidance upwards for the current fiscal (2006-07), riding on a strong dollar and increasing business.
According to the company's financial results for the first quarter (Q1) of FY 2006-07 released on Wednesday, net profit grew by a whopping 50.4 per cent to Rs 8 billion ($173 million).
This was up from Rs 5.32 billion in the corresponding quarter a year ago under the Indian GAAP and sequentially by 18.9 per cent from the previous quarter (January-March) at Rs 6.73 billion.
Similarly, the consolidated revenue for the quarter under review has shot up by 46 per cent to Rs 30.15 billion from Rs 20.71 billion in the same quarter a year ago under the Indian GAAP and sequentially by 15 per cent from the last quarter at Rs 2.62 billion.
Under the US GAAP, the company posted net income of $174 million in the first quarter as against $122 million in the same quarter a year ago, registering year-on-year (YoY) growth of 43 per cent.
In the case of consolidated revenue, the YoY growth is 38.7 per cent to $660 million from $476 million in the same quarter a year ago.
As a result, the earning per share (EPS) for the first quarter has increased by 46 per cent to Rs 28.71 from Rs 19.63 under the Indian GAAP.
"Our efforts in building the brand, developing the client base and expanding strategic accounts have fuelled our robust organic model," said Infosys CEO, president and managing director Nandan M Nilekani in a statement after the financial results were notified to the stock exchanges.
Admitting the company benefited from the depreciation of the Indian rupee against all major currencies during the quarter, chief financial officer (CFO) V Balakrishnan said the company was able to maintain its margins despite increase in compensation (salaries) and visa costs.
"We continue to focus on margins without compromising on investments needed to meet our growth objectives," Balakrishnan said.
For the first quarter, the original guidance, given in April, projected a consolidated income of Rs 28.16 billion under the Indian GAAP and $633 million under the US GAAP.
"We witnessed strong growth during the quarter and we believe we have the required scale, execution capabilities and end-to-end service offering to take advantage of the momentum seen in the marketplace," said chief operating officer and board member S Gopalakrishnan.
Driving on a strong business growth and a weakening rupee, the company has revised its original revenue guidance for the entire fiscal to Rs.134 billion under the Indian GAAP from Rs.124 billion, given in April, projecting YoY growth of 41 percent as against 31 percent earlier.
Under the US GAAP, the consolidated revenues is expected to be about $2.92 billion for 2006-07 as against $2.8 billion projected in the beginning of the current fiscal (April 14).
Similarly, for the second quarter (July-September) of the current fiscal, the consolidated income is expected to be about Rs 32.8 billion, projecting YoY growth of 43 per cent under the Indian GAAP and $715 million under the US GAAP, with YoY growth projection of 37 per cent.
During the quarter under review, the company has added 38 new clients as against 36 in the same quarter a year ago. Sequentially, however, the client acquisition has remained the same as it was in the previous quarter (Jan-Mar) at 38.
On the hiring front, the company and its subsidiaries added 5,694 employees, taking the total workforce to 58,409 at the end of June 30 as against 39,806 employees a year ago and 52,715 at the end of March 30, 2006.