Infosys Posts 9.6% Quarter Profit Rise, Outlook Cautious
India's Infosys Technologies missed market forecasts with a 9.6 percent rise in quarterly profit, and sounded a cautious note for its short-term outlook on global worries that could hit outsourcing demand.
India's No. 2 software services exporter on Tuesday forecast revenue for the new fiscal year to March 31 would grow by 19-21 percent to $4.97-$5.05 billion, compared with a rise of 35 percent in 2007/08.
Citi had expected Infosys, the first major Indian software firm to report earnings, to forecast revenue growth of about 20 percent in dollar terms for the current fiscal year.
"While there could be short-term challenges due to global economic uncertainties, we see significant growth opportunities in the medium to long term," Chief Executive S. Gopalakrishnan said in a statement.
Shares in Infosys, which have a weight of 6.6 percent on the benchmark Mumbai stock index, were up 2.6 percent in Asian trade.
Infosys said it would increase the dividend pay-out ratio to up to 30 percent of net profit from 2008/09 from 20 percent.
Helped by an army of English-speaking workers and cheaper wages, India's estimated $64 billion software services sector has thrived by winning deals from overseas clients, with the U.S. accounting for more than half of the sector's revenue.
But growing evidence of a recession in the United States is expected to slow growth.
Nasdaq-listed Infosys , which develops applications, designs supply
chains and offers back-office services, said net profit for fiscal fourth quarter ended March rose to 12.50 billion rupees ($313 million) from 11.4 billion a year earlier.
A Reuters poll of 15 brokerages had forecast a net profit of 12.6 billion rupees.
Infosys' bigger rival, Tata Consultancy Services, which reports on April 21, said last month that two of its 15 biggest clients had delayed some projects during the quarter.
Indian software exporters get the bulk of their revenue from banks and financial firms, sectors which have been battered by the turmoil in global financial markets.
The firms are pushing into emerging markets but analysts see no quick change in their revenue stream, compared with rivals such as Accenture that gets 60 percent of its revenue from outside the United States.
Shares in Infosys, which counts Goldman Sachs, ABN AMRO and Philips Electronics among its clients, fell 19 percent in the March quarter, versus a 22 percent drop in the sector index and a 23 percent dip in the benchmark index.