Outsourcing demand boosts Infosys

Indian computer firms like Infosys are finding it harder to retain staff

Indian software giant Infosys has reported a 50% increase in quarterly profit on the back of rising demand for its outsourcing services.

Net profit for the three months to the end of June beat estimates, rising to 8bn rupees ($173m; £94m).

Infosys said it added 38 new clients and 5,700 staff during the period.

India's second-biggest computer services firm also raised its sales and profit forecasts for the rest of the financial year.

Staff retention

In a statement, the company said its results for the quarter had benefited from the falling value of the rupee against all major currencies.

Most of Infosys' revenues come from exports, particularly the US market, which is responsible for 65% of sales.

Analysts say Indian companies such as Infosys and rivals Tata Consultancy Services and Wipro are set to pick up more business as Western companies look to save money by outsourcing business processes.

India's National Association of Software and Service Companies (NASSCOM) has estimated that contracts worth a combined $100bn will come up for grabs over the next two years.

However, the growth in business is making it harder for companies like Infosys to retain staff, and wages are rising at an estimated 15% a year - putting pressure on margins.