BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 

Tuesday, 10 July, 2001, 18:54 GMT 19:54 UK
Infosys profits jump
Infosys brain-storming session
Infosys: Profits up
By Sanjeev Srivastava in Bombay

Indian software firm Infosys Technologies has announced a 49% jump in net profit to 1.9bn rupees ($ 40.5m) for the quarter ended 30 June.

The results announced in Bangalore showed that Infosys - India's second largest software exporter - was achieving better than the 30% growth predicted by chairman NR Narayan Murthy in April.

But Mr Murthy warned against any complacency.

"The economic environment continues to be challenging and companies around the world seek to realise higher returns on their technology investments," Mr Murthy said.

He said while the company was pleased with the growth rate achieved in the first quarter, the company was aware of the market realities and the pressure on its billing rates.

'Price pressure'

While maintaining a 30% growth projection for the remaining part of the year, Mr Murthy said there was "price pressure on the company and the market place continued to be challenging".

Mr Murthy should know. While a nearly 50% jump in profits is a job well done by any standards, it is not so by the exacting growth targets India's best known technology company has set for itself in recent times.

Year after year - through the better part of the past decade - the company recorded growth of at least 100%.

This quarter has for the first time seen a fall - of nearly 6 % - in the company's offshore billing rates even as the online rates have registered a modest rise of 1.2%.

Hiring down

One indication of the rather tough times the Indian software giant is facing comes from the number of employees hired in the quarter to end-June.

Just 116 employees were added to the Infosys team in the April-June quarter against the 921 hired in the previous quarter.

The total number of employees stood at 9,947 at end-June.

Infosys shares - which reached a dizzying 16,000 rupees at the height of the technology boom in early 2000 - closed flat on Tuesday at about 3,500 rupees.

This was despite the fact that the company predicts it will earn 25bn rupees this year compared with last year's 19.6bn.

'Not much of an upside'

According to Maulik Sharedalal, analyst and director of Bombay brokerage Kaji & Maulik Securities, Infosys' results are reasonably positive.

But he does not think the stock price will move up sharply in the near future.

"The problem is not with the result. Its pretty good under the global conditions of slowdown the company is operating in.

"But then there are no great positive surprises either and if the same growth rate is maintained in the remaining three quarters there is not much of a upside for Infosys stock from the current level which factors in a 30% growth rate," Mr Sharedalal said.

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

03 Jul 01 | South Asia
Mutual fund's move hits Indian markets
11 Apr 01 | South Asia
Indian stocks slide on software results
09 Jan 01 | Business
Infosys suffers despite profit rise
12 Feb 01 | Business
Nasdaq targets India
10 Oct 00 | South Asia
Boomtime for Indian software giant
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories