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Infosys Expects Up to 36 Percent Annual Growth

News
Jul 12, 2006 2 mins
Outsourcing

Infosys Technologies on Wednesday said it expects revenue to grow by up to 36 percent in its fiscal year that runs through March 31 next year, reflecting an overall buoyancy in the Indian outsourcing industry.

Such growth would put it slightly ahead of the industry as a whole. India’s exports of software and services are expected to grow by 27 percent to 30 percent in the fiscal year, with total revenue between US$29 billion and $31 billion, India’s National Association of Software and Service Companies said in June.

Infosys expects its revenue for the year to be about $2.91 billion. The company is the second-largest Indian outsourcer, after Tata Consultancy Services of Mumbai.

For the quarter that just ended on June 30, Infosys reported revenue of $660 million, up 39 percent over the same quarter last year. Its profits were $174 million, up by 43 percent. The results are according to U.S. generally accepted accounting principles.

The company added 38 new clients and 5,694 employees during the quarter, taking the total number of employees as of June 30 to 58,409.

The quarterly results benefited from the depreciation of the Indian rupee against all major currencies, which helped Infosys to maintain its margins despite higher salary and visa costs.

Infosys and other Indian outsourcers compete with multinational services companies such as Accenture and IBM, which have set up offshore services delivery centers in India. Some of these are bidding against Indian outsourcers even on smaller contracts, said Siddharth Pai, a partner at sourcing consultancy firm Technology Partners International of Houston, Texas.

Electronic Data Systems (EDS) acquired a majority stake in Indian outsourcer Mphasis earlier this year, which will help EDS bid for smaller application development and maintenance contracts.

However, there is enough business going around to keep both Indian and multinational companies busy, according to Indian outsourcers.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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