Infosys Q3 net up 33 pct, cuts FY12 forecast

Infosys Ltd beat market forecasts with a 33 percent rise in quarterly profit as a weak rupee boosted margins, but it cut its full-year revenue outlook because of the debt crisis in Europe, its second-biggest market.

Ups and downs

India's export-driven software services companies are bracing for a slower pace of outsourcing contracts due to the lingering debt crisis in Europe. Bangalore-based Infosys, India's second-largest software services exporter, forecast dollar revenue growth of 16.4 percent for the fiscal year to March 31, down from 17.1 percent to 19.1 percent projected in October.

"The global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry," Infosys Chief Executive S. D. Shibulal said in a statement.

India's $76 billion IT services industry competes with Accenture Plc and IBM for orders to maintain information technology infrastructure and build software applications. More than half of Infosys's revenue is generated from the United States. Global spending on information technology will rise at the slowest pace in three years in 2012 as Europeans, worried about the region's sovereign debt crisis, are cutting back on investments, research firm Gartner Inc said last week.

Gartner predicted global IT spending would rise 3.7 percent in 2012, down from its earlier estimate of 4.6 percent. The forecast for Western Europe was slashed to a 0.7 percent drop in spending from a previously expected rise of 3.4 percent. Infosys , which is also listed in New York, said consolidated net profit rose to 23.72 billion rupees in the third quarter ended December 31 from 17.8 billion rupees a year earlier, helped by an 8 percent fall in the rupee.

Revenue rose 30.8 percent to 92.98 billion rupees, as the company, whose customers include BP Plc , Procter & Gamble Co and Volkswagen AG , added 49 clients. A Reuters poll of 10 brokerages had forecast a profit of 23.1 billion rupees on revenue of 92.2 billion rupees. The rupee was the worst performer among Asian currencies in 2011, losing nearly 16 percent against the dollar. The company, worth about $31 billion, fell nearly a fifth in 2011, far more than its bigger rival Tata Consultancy Services that dropped 0.4 percent and compared with a fall of about 16 percent in the sector index.

Reuters