Thaindian News

Bangalore, June 20 (IANS) Infosys Technologies Ltd chairman and chief mentor N.R. Narayana Murthy Saturday admitted that with many of its clients reducing their IT budgets, the bellwether’s growth would be impacted this fiscal.
“A recent survey of our top 135 clients indicated that a majority of them would downsize their IT budgets. This will impact our revenue growth during the current year,” Murthy told shareholders at the company’s 28th annual general meeting (AGM) here.

Reiterating the guidance the company gave in April for the current fiscal, he said as a result of lower IT budgets, the revenue would be 3.1-6.7 percent less than last fiscal (2008-09) in dollar terms.

“At this point of time, we live by the guidance of $4.35-4.52 billion we have given for this fiscal. We are also in the blackout period. We are not supposed to talk about the current fiscal now,” Murthy told reporters on the margins of the AGM later.

Giving an overview of the global software major’s performance in fiscal 2009 at the AGM, Murthy said the entire world was going through a severe financial crisis that had led to a global recession.

“Critics of the free market system say that there is still more pain to come and the financial bubble of the past many years would need time to heal. We have taken several steps to mitigate the impact of the current crisis. We are confident that we will be stronger when the economic uncertainties end,” Murthy assured about 500 shareholders at the AGM.

To buttress his point, he referred to the International Monetary Fund (IMF) estimates that the global financial system would suffer losses to the tune of $4 trillion, with the OECD countries constituting most of the losses.

“For the first time since the World War II, the global economy could contract by up to two percent. Millions of people have lost their jobs, thousands of companies have gone bankrupt, leading the governments the world over to pump in trillions of dollars of liquidity into the financial system,” Murthy recalled.

Reflecting on the fiscal 2009, Murthy said the company ran into a perfect storm and its growth and revenues were severely impacted.

“There were violent currency fluctuations, with the dollar appreciating against the euro by 15.9 percent and pound sterling by 28 percent. Despite these adversities, we ended the year with our revenues at $4.66 billion, growing by 11.7 percent in dollar terms,” Murthy recalled.

At the same time, a record depreciation of the Indian rupee by 26.7 percent during the last fiscal helped the IT behemoth to grow by 30 percent, as per the Indian accounting standard.

Asked if the company would revise its guidance during the course of the fiscal as has been the practice in the past, Murthy said he was not allowed to say about the immediate or medium-term future.

“When we announce our results for the first quarter (April-June), my colleagues will be able to answer, as we are not supposed to talk about the guidance in this blackout period,” Murthy clarified.