Infosys Q2 results: Macro-eco situation to impact budget
October, 12th 2011
Infosys today 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.
He said though the company has neither seen any project cancellation nor budget cuts at this juncture, at the same time, the global economic situation will have an impact on clients' budgets for next year.
"Next year budgets are yet to be finalised 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 Rs 1,906 crore for the second quarter ended September 30.
The company posted a net profit of Rs 1,737 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 Rs 8,099 crore in the reporting period from Rs 6,947 crore in the year-ago period, translating into 16.58% growth.
Infosys' strategic initiatives and organisational 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 Rs 8,826 crore to Rs 9,012 crore for the quarter ending December 31, a year-on-year growth of 24.2% to 26.8%.
For the fiscal ending March 31, 2012, it expects revenues of Rs 33,501 crore to Rs 34,088 crore, a y-o-y growth of 21.8% to 24 per cent, the statement said.
The company's board has proposed an interim dividend of Rs 15 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 September 30, 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 Rs 18,601 crore, as against Rs 17,388 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 Rs 1,822 crore.
Infosys' revenues rose to Rs 7,470 crore in the July-September quarter from Rs 6,425 crore in the same period last fiscal.