Information Technology bellwether Infosys Technologies signalled a mood of business recovery in quarterly results declared on Tuesday, but its sunny outlook in US dollar terms was overshadowed by an erosion of value in rupee terms as the Indian currency’s strength hit export profits.
Infosys reported a marginal decline of 0.9 per cent in its net profit for January-March 2010 from the same period a year ago, at Rs 1,600 crore compared with Rs 1,615 crore.
However, in US dollar terms, the same number showed net profit soared by 8.7 per cent at $349 million in January-March 2010 from $321 million a year earlier. The company also made a strong forecast in dollar terms for the current financial year.
“The short-term volatility of rupee is extremely challenging for an exporter like us,” said S ‘Kris’ Gopalkrishnan, CEO and managing director, Infosys Technologies.
Infosys, being a software export company, earns a large portion of its revenue in dollars, but when the rupee appreciates, the company gets less rupees for each dollar exchanged.
Exuding optimism, Gopalkrishnan added that despite the challenging economic environment businesses are investing in growth for building a better future.
The company’s net profit for financial year ended March 31 was Rs 6,219 crore, up 4.1 per cent from the year-ago period. Total cash reserves of the company stood at $3.5 billion (Rs 15,500 crore) at the end of March 31,2010.