Infosys profits beat forecasts

Profits beat expectations at Infosys

Infosys, India's second largest software exporter, has reported a 31% jump in its second quarter profits compared with a year ago.

The results beat analysts' expectations and provided some tonic for India's stock market.

"The company results have come as good news and lifted market sentiments," said Arjun Kapur, managing director of Indian brokerage firm ARK Securities Limited.

"We were expecting a flat sales and profit bottom line," he added.

Infosys' shares climbed 3.5% to 2,500 rupees on the back of the news, while the 30-share BSE index closed up 3.6%.

New clients

The company said its net profit rose to 2.01bn rupees ($42.61m) in the period from July to September over the same period a year earlier.

Quarter-on-quarter, the company's net profit increased by 6.1%.

There is so much fog on the windshield and I don't think anyone has a crystal ball

N R Narayana Murthy
Infosys

Infosys also announced that it had attracted 28 more clients, including Dutch banking giant ING, during its second quarter - 11 of which were acquired after the 11 September attacks on the US.

Nandan Nilekani, the group's managing director, told the BBC's World Business Report that "there had been a steady growth in client acquisitions during the last quarter."

"I think the slowdown in the world economy began three quarters back, [and] since then we have consistently been able to meet market expectations," he added.

Nevertheless, company officials said that the military action in Afghanistan had brought some uncertainty into the business climate.

"There is so much fog on the windshield and I don't think anyone has a crystal ball," chairman and chief executive officer N R Narayana Murthy told CNBC India.

"While we have done well this (past) quarter... given the current situation in Afghanistan, there could be extraordinary circumstances that may have an impact on business for Infosys and other companies."

Conservative estimates

Earlier this year, Infosys had warned that its revenues would only grow by 30% this year, after doubling in past years.

It is sticking by this estimate because it believes that market conditions are still tough.

"The market conditions continue to be challenging and pricing pressures continue," said S. Gopalakrishnan, deputy managing director of Infosys.

Talking about the global economic slowdown, Mr Nilekani said: "We hope to meet the challenges of the future and make sure we continue to grow and be profitable."