BANGALORE, INDIA: The financial results announced by Infosys today was more of a shock and disappointment. And that disappointment and caution was clear in the words of Infosys executives too.

On a day that saw Infosys shares drop by over three per cent, the top executives at Infosys confessed that everything is not positive.

Also read: Infosys adds 38 new clients, raises outlook

“We see distant cloud in horizon, but in spite of good growth, everything is not positive,” said Kris Gopalakrishnan, after the results were announced. “We have to watch and see if these clouds are rain clouds or cyclone. But Infosys is better prepared to face the storms than any other company.”

What affected the result was apparently the market fear that a weak European economy could curb orders. Its sales contribution from Europe fell to about 20 per cent from nearly 25 per cent a year ago and 23 per cent in January-March.

Infosys also agreed that the attrition rate is high this time. “The attrition is high during the first quarter,” said Board Member T.V. Mohandas Pai.

The global software major's attrition increased to 15.8 per cent from 11.1 percent a year ago and sequentially from 13.4 per cent a quarter ago. Though the gross addition during the first quarter under review was 8,859 people, the net addition was 1,026 only, as 7,833 employees quit for various reasons, including involuntary attrition.

Pai also said Infosys has taken several steps, including a compensation hike, to reduce attrition rate.

Meanwhile, chief financial officer V. Balakrishnan said that Infosys would raise hiring outlook to 36,000 in the 2011 financial year.

At 1.35 IST Infosys shares were traded at Rs. 2,787.40, 3.72 per cent down compared to the previous day's close.