The Hindu : Robust growth in Infosys' revenue

Online edition of India's National Newspaper
Thursday, Jul 11, 2002

Business

Business

Robust growth in Infosys' revenue

By Our Staff Reporter

Nandan Nilekani

BANGALORE JULY 10. Infosys Technologies maintained its prima donna status outsurpassing its previous estimates for the first quarter-ended June 30, 2002. Having recorded income of Rs. 764.62 crores for the first quarter, the company showed a 24 per cent jump in income over Rs. 612.52 crores recorded in the corresponding quarter last year.

During this period the net profit of Rs. 216.85 crores over Rs. 190.03 crores last year with a 14.11 per cent rise has, "reflected a robust revenue growth during the quarter. We, however, continue to remain cautious due to delay in client and prospect visits arising from adverse travel advisories and a challenging global business environment,'' observed Nandan M. Nilekani, CEO, President and Managing Director, Infosys Technologies.

While Infosys' overall business has not been affected, the newly established Progeon, its business process management (BPM) subsidiary, has "received an impact due to the travel warnings with a need to be more de-risked,'' according to Phaneesh Murthy, CEO, Progeon. While Progeon obtained two clients with projects valued at $30 million, Infosys acquired 23 new clients during the first quarter including New Jamaica Bank, Bear Stearns, Himawari Securities Inc and Chicos FAS.

Cash and cash equivalents increased by Rs. 62.27 crores during the quarter from Rs. 1,026.96 crores to Rs. 1,089.23 crores after having incurred a capital expenditure of Rs. 53.79 crores. The company, however, has no plans of returning its burgeoning cash reserves to the shareholders, Mr. Nilekani said announcing Infys' audited results after the board of directors took it on record here today.

Meanwhile, gross addition of employees during the first quarter stood at 722, out of which 144 were lateral hires with 566 net additions. This took the total to 9,944 software professionals. "We have completed recruitment of outstanding offers and the next recruitment cycle would include 200 lateral employees,'' remarked Shibulal Mehta, member, Infosys board. Effective from July 1, 2002 the company will implement a role-based structure to streamline efficiency and productivity of employees allowing them to specialise in niche areas along with performance-based compensations.

The telecom sector is still on the downside and has contributed 15.2 per cent to Infosys' revenues, compared to 15.4 per cent last year. Banking, manufacturing, utility and aerospace engineering segments have continued to benefit the company. Infosys will explore the lifesciences area with thrust on contract research and drug discovery cycle.

Plans are also on for a representative office in China. However a full-fledged office will only be set up `after Infosys has received more data on the market dynamics and requirements.'

US travel warnings ill-advised

Former Senator Larry Pressler who was present at the audit results of Infosys said the adverse travel warnings issued by the U.S. Government was ill-advised and wrongly timed. "India and the U.S. have extremely synergistic relationship.

The U.S. has an exaggerated view of the tensions here. Personally, I would like the advisories to be lifted as soon as possible since I feel it is unfair as India has not done anything to deserve this,'' Mr. Pressler said.

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