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Infosys Q4 net up 29%, forecasts weak FY2010

Infosys Q4 net up 29%, forecasts weak FY2010
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First Published: Wed, Apr 15 2009. 10 58 AM IST
Updated: Wed, Apr 15 2009. 10 58 AM IST
Bangalore: Infosys Technologies Ltd, reported a stronger-than-expected 29% rise in quarterly profit but gave a downbeat forecast in dollar terms for the current fiscal year amid slowing outsourcing momentum and price pressure.
India’s second-largest software services exporter forecast revenue for the year ending March 2010 would fall 3.1-6.7% to between $4.35 billion and $4.52 billion, after rising 11.7% last year and after growing by more than 30% over the past few years.
“The pricing for the quarter declined by 3%,” SDShibulal, chief operating officer, said in a statement.
India’s $60 billion outsourcing sector, which provides an array of services from software coding to managing computer networks and call centres, face headwinds such as weak demand, cut-rate prices and rising competition from global rivals.
The sector has also been dented by a large accounting fraud at Satyam Computer Services.
On Monday, mid-sized Indian outsourcer Tech Mahindra won an auction for a controlling stake in Satyam.
After the acquisition, Tech Mahindra will become the country’s No. 4 IT services exporter, and could be in a stronger position to compete for large deals with leader Tata Consultancy Services, Infosys and third-ranked Wipro.
Infosys, which develops applications, designs supply chains and offers back-office services, said net profit rose to Rs1613 crore billion ($323 million) in January-March, its fiscal fourth quarter, from 12.49 billion reported a year ago.
A Reuters poll of 13 brokerages had estimated a net profit of Rs1,566 crore billion for Infosys, which counts Goldman Sachs, Philips Electronics, and BT Group among its clients.
An army of English-speaking engineers and cheaper wages has driven an outsourcing boom in India, but turmoil in global markets and a recession in the United States, which accounts for more than half the sector’s revenue, have halted the scorching pace of growth.
Shares in Infosys, valued at more than $16 billion in the market, jumped 19% in Jan-March, outperforming a nearly 3% gain in the sector index and a nearly 1.0% rise in the main index.
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First Published: Wed, Apr 15 2009. 10 58 AM IST