Infosys Technologies, India’s No. 2 software services exporter, is seeing a rise in outsourcing deal flows due to a recovery in the
global economy, a top official said on Wednesday.

Pricing for its services was likely to remain stable, Kris Gopalakrishnan, chief executive officer, told reporters on the sidelines of a seminar.

Infosys and its rivals such as Tata Consultancy Services and Wipro had seen a sharp drop in demand for outsourcing services and pressure on prices a year ago, as recession crimped investments on IT services by their clients.

Source:http://economictimes.indiatimes.com/infotech/ites/Infosys-says-outsourcing-deal-pipeline-improving/articleshow/5667392.cms

Clearing the air about Obama’s outburst against the companies outsourcing to India, Infosys Technologies said that the statement was not directed towards Indian companies.

Stating that Obama’s anger was only aimed at US companies operating in multiple countries, Kris Gopalakrishnan, CEO and MD of Infosys said that Indian companies were not the target of Obama’s stern words.

“What he (Obama) is talking about is US companies setting up operations outside US. Not about outsourcing to India. That is very clear. But it is not about us as far as I can see,” Gopalakrishnan said.

Gopalakrishnan made the statement while addressing a conference on Public Private Partnership for Internal Security-Vision 2020 here.

US President Barack Obama had on Friday, Feb 12, accused US companies outsourcing to India of unfair practices, adding that it was time to withdraw tax breaks to such companies.

Asked whether Obama’s remark would lead to Infosys shifting interest from USA to other countries, Gopalakrishnan replied that the company has been already doing it to secure business.

Speaking about the company’s recruitment plans for 2010, he said that while the total in take of employees will be decided in Apr 2010, the company has decided to offer campus placement to 15,000 graduates.

Source:http://news.oneindia.in/2010/02/15/indian-comapnies-free-from-obamas-ire-infy-chief.html

It feels like 2004 all over again. The Infosys results point to a major upcycle in outsourcing, driving profits up to levels not imagined till recently.

That was the verdict from Bhavtosh Vajpayee and Nimish Joshi, analysts with CLSA Asia-Pacific Markets, after India’s No 2 software company declared its December quarter numbers on Monday.

Net profit rose 2.7% to Rs 1,580 crore over the July-September quarter, which is at least Rs 100 crore more than what analysts had predicted.

To top it, the company said it is raising its sales guidance for the year ending March 31, 2010 by 2% to $4.76 billion (Rs 21,763 crore) — reversing an earlier prediction of a 1.3% drop — because of global economic recovery, which is expected to generate greater orders for software and services.

The company, however, warned a rising rupee can impact its profits because it will get less for the dollars it earns abroad.
Software shares gained after the Infosys results.

“After six years, we have seen a December quarter this strong. With a lot of business billed hourly/daily and more holidays, the December quarter (usually) mean a weak seasonal pattern. Not so this time,” Vajpayee and Joshi exulted.

The duo view outsourcing as “binary trend”, which indicates extreme troughs and highs.

“When decision making stops among customers, it is a deep freeze. The Indian cost-saving proposition loses relevance amid restructurings, bankruptcies, mergers and management changes among customers. (but) when outsourcing rains, it pours,” they said.

The two are now expecting surge in outsourcing, which will drive multi-quarter earnings upgrade cycle.

“It will be hard(er) to model the extent of growth possible, and Infosys’ latest quarterly report shows just why,” they write in their concise report.

Kris Gopalakrishnan, chief executive officer (CEO) of Infosys Technologies, said the worst was behind for Infosys and the IT sector in general.

“When we discuss with our customers, they are confident about their business and that (confidence) is reflected in their decision making. They are now committing to larger projects. In this quarter, we won a large project worth $200 million,” he said.

Gopalakrishnan believes post-recession customers’ focus on cost will see a flood of outsourcing deals, which will benefit offshoring companies. “2010 will be a better year then 2009,” he said.

Manoj Singla, Nishit Jasani and Gourav Vijayvergiya, analysts with investment bank JP Morgan, expect the pace of growth of the IT sector to beat the expectations of industry and markets.

“The Infosys results highlight the continued recovery in the IT spending environment with the pace of growth being higher than expectations,” they said in a report after the results on Tuesday.
Global corporations are being forced to cut costs due to the ongoing recession by outsourcing work to companies like Infosys.

“Indian vendors have to thank the downturn for the next step up in their share of the $800 billion global IT services pie. The offshore proportion is rising for most services. The sector has not broken free of challenges yet but we believe opportunities will overwhelm risks in the next two years,” Vajpayee and Joshi said.

However, Ganesh Natarajan, global CEO of Zensar Technologies and former chief of Nasscom, says the increase in outsourcing will not be an ‘explosion’, but will be ‘gradual’.

“We will see the 2007 kind of growth (15%-18% annually) only in 2011-12. In this fiscal, we will see earnings grow 10%-12%, which will be higher than the 5%-7% we have forecast for the current fiscal,” Natarajan said.

Source:http://www.dnaindia.com/money/report_infosys-results-signal-coming-it-boom_1334119

Infosys (INFY) late Monday posted better-than-expected results for its fiscal third quarter ended December – and provided strong guidance for the March quarter.

The IT outsourcing company posted Q3 revenue of $1.23 billion and profit of 59 cents a share; that was ahead of the Street at $1.17 billion and 51 cents.

For Q4, the company sees revenue of $1.24 billion to $1.25 billion and a profit of 56 cents; the Street consensus was for $1.19 billion and 51 cents.

For the full year, INFY now sees revenue of $4.75 billion to $4.76 billion with a profit of $2.26 a share; previous guidance had been for $4.6 billion to $4.62 billion; the Street had been expecting profits of $2.14.

Source:http://blogs.barrons.com/techtraderdaily/2010/01/11/infosys-posts-beat-and-raise-dec-qtr/

The month ahead should soothe market players who have been displeased by the lackluster trade seen of late on the Bombay Stock Exchange’s Sensex. As corporate earnings for the October-December quarter start pouring in, Dalal Street will be buzzing with activity, giving investors ample triggers to pick or dump stocks.

But earnings for the fiscal third quarter will not just test expectations that the stock market has priced in, but will also essentially show whether the optimism surrounding India’s economic recovery holds good.

Analysts widely predict third-quarter earnings for the benchmark 30 stock Sensex to show year on year growth. An average poll of seven brokerages forecasts Sensex earnings to rise 19.3%, while sales are expected to grow 20.8%.

Even as this growth will largely reflect upon the lower base of the last year’s quarter when corporate profits took a hit from the financial crisis it is crucial to note that the quarter would mark the return of positive growth in earnings after four straight quarters of decline.

“The recovery is getting more broad-based, with only five companies out of 30 likely to show profit decline,” Bank of America Merrill Lynch said in a report, adding that combined sales of Sensex companies will show an increase in the period after contracting for each of the last three quarters.

The robust sales volume recorded by automakers in the last quarter will see them lead the earnings’ expansion on the Sensex. Companies in the metals, cement, capital goods (including power) and consumer goods spaces are likely to be the other major contributors to growth, helped by a strong rebound in domestic consumption.

However, performance of telecom companies will continue to be marred by the cut throat competition that has seen new service providers offer cheaper rates to win customers, pushing established players into a pricing war.Most companies in India now offer calls at 1 cent/minute, under certain schemes.
Infosys, first as usual As always, IT bellwether Infosys Technologies Ltd.will kick off major corporate results when it reports Tuesday.

Earnings for India’s second largest software services exporter by revenue are keenly watched, as performance at Infosys is often seen as an indication of results for its peers, such as larger rival Tata Consultancy Services Ltd.as well as Wipro Ltd.and HCL Technologies Ltd.

Thirteen analysts on average expect the $31 billion Bangalore based Infosys to post a 10% year on year fall in third-quarter net profit to 14.83 billion rupees ($327 million) on revenue of 55.80 billion rupees, down about 4% on year.

The company, which fetches about 66% of its revenue from the U.S. market, had posted a net profit of 15.40 billion rupees on revenue of 55.85 billion rupees for the July September period.

The picture doesn’t look rosy on a sequential basis, as the recent quarter was hurt by fewer working days on account of a number of festivals and an appreciation of the rupee against the U.S. dollar by about 3%.

Margins for the quarter will also be weighed by the salary hikes and promotions the company gave in October.

Still, analysts aren’t really worried, as they foresee a rise in the volume of outsourcing work for Infosys going forward amid a pick up in technology spending by its clients. Also, wage hikes are seen as a rebound in business sentiment for outsourcing.

“The decision making freeze among customers in the past six quarters is giving way to an urgency to outsource,” brokerage CLSA Asia Pacific said in a note.

Source:http://www.marketwatch.com/story/market-waiting-eagerly-for-infosys-earnings-2010-01-10?reflink=MW_news_stmp

India’s leading software services companies are set to report a fall in profit margins for the last quarter due to firmer local currency, though demand for outsourcing is improving in a global economy on the mend. The country’s $60 billion sector, which manages complex computer networks to maintaining technology operations for clients such as General Electric and Citigroup, is back to its hiring ways and is also boosting salaries.

“All the negatives in the world economy are not out of the system, but the confidence level in the IT sector is better now compared to the beginning of last year,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services.

“The companies are now expected to come back on the growth path, but the key challenge is the currency rate.” A global recovery, recent deal wins and stable prices have brightened the outlook for Tata Consultancy Services and Infosys Technologies, India’s top two IT exporters, after the global recession hit the sector last year. The rupee, which rallied to a 15 month high on Thursday, surging wages, and intense competition from global firms such as IBM, Accenture and Hewlett-Packard are seen as key risks for the sector.

The rupee is set to rise another 4 percent this year on top of its 4.7 percent increase last year, with gains driven mainly by inbound portfolio investment, according to a Reuters poll. Indian tech firms are a magnet for thousands of young jobseekers with their sprawling campuses offering pizza and Subway outlets, golf courses and fitness centres to retain employees.

The software services sector gets more than half its revenue from the United States but companies are furiously expanding in Asia Pacific, Latin America and the Middle East to reduce dependency in the market and boost growth. Infosys, India’s No. 2 software
exporter, a trendsetter in the showpiece industry, kicks off the earnings parade on Tuesday, followed by sector leader Tata Consultancy on Friday and third ranked Wipro on Jan 20.

Infosys is expected to post its first year on year drop in October December profit, as wage rises, a stronger rupee and higher sales and marketing costs dent margins. Valued at $32 billion, Infosys, which had previously frozen salary hikes and promotions for this fiscal year, said in October it would raise pay by an average of 8 percent this year for its employees in India.

Markets will be keen on the company’s comments on business and pricing trends, hiring and IT budgets of its overseas clients in 2010. Last month, Accenture reported a fall in first quarter earnings and gave a sales outlook for the current quarter that was weaker than analysts’ expectations.

Source:http://economictimes.indiatimes.com/Earnings/Infosys-may-report-first-drop-in-net-profit-on-wages/articleshow/5423525.cms