Infosys lowers revenue forecast in difficult market

BANGALORE – Faced with a tough business environment, Infosys Technologies, India’s second largest outsourcer, again lowered its dollar revenue forecast for the company’s fiscal year ending March 31.

The company forecasts revenue for the year in the range US$4.67 billion to $4.71 billion, after a year-on-year growth of between 11.8 per cent and 12.8 per cent, or 15.6 per cent to 17.6 per cent at constant currency rates.

Infosys and other Indian outsourcers are struggling as their customers tighten IT budgets or defer decisions in an economic crisis.

In a challenging environment, Infosys’ focus is on creating value for clients, running an optimized business, and evolving its business model so as to emerge stronger when the global economy starts recovering, the company said.

The company is expected to benefit from the troubles of another Indian outsourcer, Satyam Computer Services. Caught in a financial scandal, Satyam may lose customers who will turn to other Indian suppliers, Forrester said last week.

In October, Infosys lowered its revenue outlook for the fiscal year to between $4.72 billion and $4.81 billion, with year-on-year growth of 13.1 percent to 15.2 percent, or 16 percent to 18 percent at constant currency rates. The company’s revenue for the quarter ended Dec. 31 was up 8 per cent from the same quarter last year at $1.17 billion, while profits were 6.4 per cent higher at $332 million.

The company now reports results in accordance with International Financial Reporting Standards (IFRS). Previously, it reported them according to U.S. Generally Accepted Accounting Principles (GAAP).

The share of the company’s revenue from North America rose to 64.5 per cent in the quarter, up from 61.5 per cent in the previous quarter. The insurance, banking and financial sectors accounted for 34.9 per cent of the company’s revenue in the quarter.

The company added 2,772 employees in the quarter, taking the total to 103,078 employees as of Dec. 31. It also added 30 new customers in the quarter.

In August, 2008 Infosys’s HCL Technologies division successfully made a bid to buy Britain’s Axon Group, an SAP systems integrator.

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