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Infosys Q3 net up 24% y-o-y, meets forecast

Shares of Infosys Technologies Ltd, India's No 2 software exporter, fell as much as 4.46 per cent in opening trading on Thursday after it reported net profit rose 24 per cent in October-December from a year ago, meeting expectations.

Infosys' stock had surged 18 per cent since the start of 2002 on increased market optimism about a near-term recovery in the software sector. On Wednesday, Infosys' shares lost eight per cent to Rs 4,430.75.

After the first 20 minutes of trading, Infosys' shares were down 4.05 per cent at Rs 4,251.00.

The Indian software bellwether reported third-quarter profit of Rs 2.06 billion or Rs 31.02 per diluted share, against Rs 1.66 billion or Rs 24.86 a share a year earlier.

Its profit exactly matched the median forecast of Rs 2.06 billion in a Reuters poll released on Wednesday.

Total income rose 23.04 per cent to Rs 6.61 billion, slightly lower than the poll's estimate of Rs 6.7 billion.

"The results are good and in line with projected numbers. Both topline and bottomline has met expectations," said Chetan Shah, an analyst at Quantum Securities.

"The stock has almost doubled in the past three months, so investors are now likely to discount these results."

Analysts had expected Infosys, which is struggling with weaker demand and pricing pressures from its main US market, to indicate that business is picking up after a year-long industry slump worsened by the September 11 attacks in the United States.

Infosys serves about 300 diversified global clients such as Nortel Networks and ING Group with its 10,000-strong workforce split almost equally between India and at client sites abroad.

Sanjeev Goswami, an analyst at SSKI Securities, said, "what is more important today is the guidance the company gives for FY 2003."

Narayana Murthy, Infosys' chairman and chief executive officer, said in a statement that short-term business uncertainties remained and the outlook for the long-term was cautious.

But the Indian high-tech bellwether retained its earnings forecast for the full year to March. Infosys forecast fourth-quarter software services income at Rs 6.36-6.60 billion and earnings per share of Rs 30-32.

It projected software services income for the year to March at Rs 25.6-25.8 billion and earnings per share at Rs 120-122.

"This quarter (October-December) was one of the most challenging, both for Infosys and the Indian software industry," Murthy said.

Software spending continued to weaken globally and the September 11 attacks on the United States, Infosys' main market, created a lot of uncertainty, he added.

Still Infosys said it added 33 new clients during the quarter, compared to 28 clients in the preceding July-September quarter.

The company, based in the Indian high-tech capital of Bangalore, said volumes last quarter grew 3.4 per cent over the July-September quarter, but prices fell 3.2 per cent.

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