BANGALORE, 10 OCTOBER 2008 - Infosys Technologies, India's second largest outsourcer, Friday reported slower growth in revenue and profits for the quarter ended September 30, reflecting the impact of the economic crisis in the U.S., its largest market.
Infosys also revised its US dollar revenue guidance, citing the current economic situation and the drastic depreciation of major global currencies against the US dollar.
Revenue for the company's fiscal year ending March next year is now expected to be in the range of US$4.72 billion and $4.81 billion, with year-on-year growth of 13.1 percent to 15.2 percent, and 16 to 18 percent in constant currency
It forecast in July that revenue for the fiscal year was expected to be in the range of $4.97 billion and $5.05 billion, with year-on-year growth of between 19 percent and 21 percent.
Infosys also announced Friday that it would not increase its bid for Axon Group, an SAP consultancy in the U.K. HCL Technologies, another Indian outsourcer, announced in September that it has made a cash offer for Axon that values its entire issued and to-be-issued share capital at £441.1 million] ($817 million). Infosys had in August made a cash offer to acquire Axon in a deal valued at £407.1 million.
For the quarter, Infosys reported revenue of $1.216 billion, up 19 percent from the corresponding quarter last year. Profits grew by 17.22 percent to $320 million.
The growth is far slower than the 37 percent revenue growth and 36 percent profit growth the company had reported in the second quarter a year ago.
Revenue growth in rupees was however higher at 32 percent in the quarter because of the appreciating US dollar. Profit growth was 30 percent in rupees for the quarter.
The company's results for the quarter are in accordance with International Financial Reporting Standards (IFRS). It previously reported according to U.S. GAAP ( Generally Accepted Accounting Principles).
The National Association of Software and Service Companies (Nasscom) has said that the crisis in the financial services sector in the U.S. will have an impact on Indian outsourcers in the short term.
Analysts such as Forrester Research have forecast that the impact could be longer, as the financial services sector goes through a period of restructuring. About 15 to 18 percent of the business coming to Indian outsourcers from banking, insurance, and the financial services sector is now uncertain, Forrester said.
During the quarter, Infosys got 33.4 percent of its revenue from the banking, insurance, and financial services sector. The company generated 61.5 percent of its revenue from North America.
Infosys added 40 new clients during the quarter. It also added 5,927 employees for the quarter, taking the total to 100,306 employees as on September 30.
