The Hindu Business Line : Net rises, but Infosys warns of slow growth

THE largest listed software exporter Infosys Technologies Ltd that topped its earnings guidance said its net profit for financial year 2002-03 was Rs 957.93 crore, up 18.56 per cent from Rs 807.96 crore a year ago.

It, however, cautioned that its earnings growth would slow down to 13-15 per cent in the current year tracking external uncertainties.

Infosys stocks tanked by as much as 26 per cent on the Bombay Stock Exchange following such cautious outlook and sank to its six-month low, dragging the tech-sector into deep red. The guidance, which was below analysts' expectation, could sway investors' sentiment towards the technology sector, dealers said.

Total income for the year was Rs 3,622.69 crore, up 39.14 per cent from Rs 2,603.59 crore a year ago. The company said its January-March net profit was Rs 259 crore, up 23.14 per cent from a year earlier and up 1.05 per cent sequentially. Total income of the company grew by 6.39 per cent sequentially to Rs 1,019.85 crore in the fourth quarter of the last fiscal.

"Despite the challenging market conditions and uncertainties we have done well and beaten our own guidance," said Mr Nandan Nilekani, CEO, President and Managing Director of Infosys.

The company said that its income from software development business for the current year would be in the range of Rs 4,408 crore-Rs 4,479 crore and earnings per share would be in the range of Rs 161-Rs 163. Income from business process outsourcing subsidiary Progeon is likely between Rs 76 crore and Rs 85 crore.

For its first quarter of the current fiscal, the company expects its income between Rs 1,033 crore and Rs 1,043 crore for its software development initiatives while Progeon is likely to report income in the range of Rs 9.48 crore-Rs 10.40 crore in the June quarter. "We have looked and analysed the macro-economic scenario including the short term impacts like Iraq war and the SARS virus, business expected from existing and prospective clients, besides our competition to arrive at the outlook," Mr. Nilekani said.

The company's board recommended a total dividend of Rs 27 per share (on par value of Rs 5 per share) for last financial year, which would see an outflow of Rs 178.81 crore as dividend payout.Revenue growth comprised a volume growth of 12.8 per cent setoff against a price decline of 5.1 per cent on a sequential quarter.

The utilisation rate including trainees was 77.80 per cent in the March quarter, up from 76.10 per cent a quarter ago.

The utilisation rate including trainees for the FY03 was 77.60 per cent, up from 70.10 per cent a year ago.

Infosys derived 45.3 per cent of its revenue from offshore efforts in the last financial year, down from 49.2 per a year ago. However, offshore engagements stayed flat sequentially at 44.5 per cent in the March quarter.

"Our global delivery model has become mainstream this year even as offshore outsourcing is gaining momentum which is reflected in our growth," Mr Nilekani said.

The company added 28 new clients in the March quarter. While North America continued to contribute the highest to Infosys' revenue at 73 per cent, 17.7 per cent of its income came from Europe, 2.1 per cent from India and rest of the world accounted for 7.2 per cent.

Cash and cash equivalents increased by Rs 206.30 crore during the March quarter, from Rs 1,432.21 crore to Rs 1,638.51 crore following a capital expenditure of Rs 70.60 crore.

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