New clients boost Infosys profits

Outsourcing may earn India $40bn this year, studies suggest

Indian outsourcing firm Infosys has seen quarterly profits rise sharply on the back of new contracts and has given an upbeat outlook for the year ahead.

Pre-tax profits in the three months to 30 June rose to $291m (£143m) from $199m in the same period in 2006.

Sales rose 40% to $928m as the firm, which now employs 75,000 staff, won new business from European and US firms.

It has increased its sales forecast for the year as a whole, revenues now expected to rise about 30% to $4bn.

'Strong demand'

Infosys supplies a range of back-office business services including software consulting, systems integration and production planning, benefiting from its low-cost base and highly trained staff.

The Bangalore-based firm added 35 new clients during the quarter including two leading European banks, a top US carmaker and a British retailer.

Infosys said its business would continue to be based on developing long-term partnerships with clients.

"As clients recognize the strategic imperative of global sourcing in an increasingly flat business world, the demand for end-to-end players like Infosys continues to be strong," said its chief executive S Gopalakrishnan.

Mr Gopalakrishnan took the helm of the business last month following a management reshuffle which saw previous boss Nandan Nilekani become chairman.

Infosys was linked with a possible merger with French IT firm Cap Gemini last month, sending its share price soaring.