Infosys projects flat growth rate this fiscal yearApril 15th, 2008 - 3:03 pm ICT by admin
Bangalore, April 15 (IANS) Infosys Technologies Tuesday projected a flat growth rate of 19-21 percent for this fiscal, the same as the 20 percent year-on-year (YoY) revenue growth achieved in 2007-08. “There could be short-term challenges due to global economic uncertainties. In the medium and long-term, however, we see significant growth opportunities,” Infosys CEO and managing director S. Gopalakrishnan said in a statement here.
On a wider base, India’s second largest IT bellwether estimated a consolidated income of Rs.202 billion ($5.05 billion) for this fiscal (FY 2009), projecting an average growth of 20 percent under the Indian and US accounting practices.
In a clear indication of the impact slowdown in the US economy would have on its top-line growth, the company said consolidated revenue in first quarter (April-June) of this fiscal (FY 2009) would also be flat at Rs.45.7 billion as against Rs.45.4 billion posted in the fourth quarter (January-April) of last fiscal (FY 2008) under the Indian accounting practice.
Under the American accounting practice, consolidated income for this quarter (Q1) will be $1.14 billion, which is equivalent to $1.14 billion posted in the fourth quarter (Q4) of last fiscal.
“A survey of our clients’ IT spending this fiscal reveals 76 percent of them have flat or lower budgets, while 24 percent have slightly increased. We, however, believe off-shoring as a pie will increase in spite of softness in our clients’ IT budgets,” Infosys chief financial officer (CFO) V. Balakrishnan told reporters here.
North America continues to be the company’s major market, with the US-based clients contributing around 61 percent (Rs.102 billion/$2.6 billion) of its total revenue (Rs.167 billion/$4.2 billion).
“Our global delivery model, combined with our consulting and solution capabilities, provides a strong platform for customers seeking efficiencies in their IT spend,” Gopalakrishnan noted.
For the fourth quarter (January-March) of FY 2008, net profit grew by 9.2 percent to Rs.12.5 billion from Rs.11.14 billion and by 1.5 percent sequentially from the previous (third) quarter (October-December) at Rs.12.3 billion under the Indian accounting practice.
Under the American accounting practice, net income, however, grew by 20 percent YoY in Q4 to $311 million from $259 million a year ago in the same quarter.
“Net profit for the fourth quarter and year ended March 31, 2008 includes tax reversal of Rs.200 million and Rs.1.21 billion respectively as against Rs.1.25 billion for the same quarter (Q4) and year (FY 2007),” the company said in its financial statement.
Consolidated revenue for the quarter under review (Q4) grew by 20 percent YoY to Rs.45.4 billion over the previous fiscal (2006-07) at Rs.37.7 billion and by 6.3 percent sequentially from the third quarter (October-December) at Rs.42.7 billion under the Indian accounting practice.
Under the American accounting practice, revenue grew by 32 percent YoY to $1.14 billion from $863 million during the same period (Q4) under the American accounting practice.
Net profit for the entire fiscal (FY 2008) grew by 21 percent YoY to Rs.46.6 billion from Rs.38.6 billion in the same period year ago (FY 2007) under the Indian accounting practice.
Under the American accounting practice, net income for FY 2008 grew by 36 percent YoY to $1.16 billion from $850 million a year ago.
Similarly, consolidated revenue for the entire fiscal (FY 2008) grew by 20 percent to Rs.167 billion from Rs.139 billion in the same period year ago (FY 2007) under the Indian accounting practice.
Under the American accounting system, consolidated income grew by 35 percent YoY to $4.18 billion from $3.09 billion during the same period.
The company has declared a whopping special dividend of Rs.20 per share (400 percent on par value of Rs.5 per share) for the fiscal 2007-08 to celebrate achieving $1.12 billion (Rs.46.2 billion) net profit for the fiscal under review.
For the fiscal under review (FY 2008), the company’s board of directors has recommended a final dividend of Rs.7.25 per share (145 percent on par) under the Indian accounting practice.
With an interim dividend of Rs.6 per share (120 percent on par), declared at the end of first half (April-September, 2007), the total dividend will be Rs.13.25 (265 percent on par) for the entire fiscal (FY 2008).
“The board has decided to increase the dividend pay-out ratio to 30 percent of net profit effective fiscal 2009, an increase of 10 percent over the current financial policy to pay dividend up to 20 percent of net profit,” Balakrishnan added.
Under the US accounting practice, special dividend will be $0.50 per ADS (American Depository Share) at Rs.40.02 per dollar.
The company and its subsidiaries have added 40 new clients during the fourth quarter (Q4), taking the total number of active clients for the fiscal to 538 as against 500 clients at the end of last fiscal FY 2007).
On the hiring front, the company made a gross addition of 5,947 employees and a net addition of 2,586 employees during the fourth quarter, taking the gross number of employees hired during the fiscal to 33,177 and net addition to 18,946 for the entire fiscal.
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Tags: accounting practice, accounting practices, bellwether, chief financial officer, consolidated income, consolidated revenue, delivery model, economic uncertainties, efficiencies, fourth quarter, global delivery, gopalakrishnan, growth opportunities, infosys technologies, q1, q4, slowdown, softness, term challenges, v balakrishnan