Infosys reported robust growth all around in the second quarter and issued a guidance that was better than some had feared. Profit in the three months to September grew 10.8% sequentially to Rs1,906 crore. And revenue gained 8.2% to Rs8,099 crore. Margins also went up by 1.9% to just over 28.16%. CEO S.D. Shibulal said the company had added 45 new clients during the quarter, with 17 of them coming from key growth areas for Infosys.
Meanwhile the Infosys guidance for the fiscal year was cut down, but didn’t alarm investors. The dollar revenue growth forecast was brought down to 17.1-19.1%. The earlier forecast was for 18-20% growth. Infosys has cited currency fluctuations as the main reason for the reduction.
In other news, the government unveiled a new draft telecom policy on Monday. And it appears to be a policy tuned to India’s increasingly mature market for cellular services. Telecom minister Kapil Sibal announced proposals meant to streamline regulations for operators and benefit customers. For starters, the draft policy reiterates that spectrum for cell phones will be available at market prices. It also proposes separating license applications from spectrum. The draft rules allow telecom firms to share and trade spectrum with each other. They also allow operators to exit the industry altogether. On the other hand, service providers will also be asked to provide free roaming across India- a move that could eat into margins. The draft policy is now open for feedback. Once comments flow in, changes will be made and a fresh draft sent to the Telecom Commission.
Photo by Bloomberg
Switching to the economy, new figures show India’s industrial output remains stuck at low levels. The index of industrial production grew just 4.1% in August. The revised figure for July is 3.8%.
And on Friday the government released figures that show wholesale inflation has remained over 9% for 10 months in a row. The wholesale price index for September stood at 9.72%. That’s only a tad lower than the August figure of 9.78%. Higher prices of fuel and power were the main culprits that kept inflation stubbornly high in September. And with no sign of an easing, the Reserve Bank is more likely to increase rates once again when it meets of 25 October- even though industrial output remains low.