Macro-economic situation to impact budget for next year: Infosys

Macro-economic situation to impact budget for next year: Infosys

Bangalore: Infosys on Wednesday said the global macro-economic situation will have a bearing on clients’ IT budgets next year and it has already started observing delays in the process of decision-making for new projects.

“Unemployment, the euro zone crisis... All of this we have to watch very carefully, so we are definitely cautious," Infosys CEO and MD S.D. Shibulal said.

“Next year budgets are yet to be finalized and these environmental issues will have an impact on the next year budget. We are seeing decision-making delays, so we need to watch next year very carefully and need to remain cautious," Shibulal said.

Despite economic uncertainty around the world, the IT bellwether reported a 9.72% growth in consolidated net profit to Rs1,906 crore for the second quarter ended 30 September.

The company posted a net profit of Rs1,737 crore in the September quarter of the previous fiscal (2010-11), Infosys said in a filing to the Bombay Stock Exchange.

The consolidated revenue of the country’s second-largest software exporter rose to Rs8,099 crore in the reporting period from Rs6,947 crore in the year-ago period, translating into 16.58% growth.

Infosys’ strategic initiatives and organizational structure will enable it to build long-term partnerships with clients and help drive their business objectives, he added.

Revenues are expected to be in the range of Rs8,826 crore to Rs9,012 crore for the quarter ending 31 December, a year-on-year growth of 24.2% to 26.8%.

For the fiscal ending 31 March 2012, it expects revenues of Rs33,501 crore to Rs34,088 crore, a y-o-y growth of 21.8% to 24%, the statement said.

The company’s board has proposed an interim dividend of Rs15 per equity share.

Infosys saw improved retention of talent during the reporting quarter. During the reported quarter, 7,090 employees left the company, which is 46% of the total additions made, compared to 72.3% in the previous quarter.

The company hired 15,352 employees, but net additions stood at 8,262 people. The total headcount of Infosys and its subsidiaries stood at 1,41,822 employees on 30 September 2011.

The company added 45 clients during the reporting quarter.

As of September 30, 2011, the company’s cash and cash-equivalents, including investments in available-for-sale financial assets and certificates of deposits, stood at Rs18,601 crore, as against Rs17,388 crore in the same period last year.

“The global currency market continues to remain highly volatile on the back of the weak economic recovery in most of the developed markets," Infosys member of the board and chief financial officer V. Balakrishnan said.

The continued focus on adding measurable value to clients, coupled with Infosys’ flexible financial model, will enable the company to make the right investments without compromising on high-quality growth, he added.

On a standalone basis, the company has reported a growth of 11% y-o-y in net profit to Rs1,822 crore.

Infosys’ revenues rose to Rs7,470 crore in the July-September quarter from Rs6,425 crore in the same period last fiscal.