Infy says clients resume visits

BANGALORE: Software exporter Infosys Technologies said in its AGM that visits by overseas clients and prospects had gathered pace in recent weeks since the war in Iraq had ended and the SARS scare had begun easing.

"Earlier, some visits were postponed, cancelled, both by clients and prospects. Now it is back to business," Deputy Managing Director Kris Gopalakrishnan told Reuters after a shareholders' meeting in Bangalore, where the company is based.

In April, India's No. 2 software exporter warned that sliding margins could slow earnings growth this year and cited the cancellation of some clients' visits due to the war and SARS as a factor for the conservative guidance.

It said its earnings growth would slow to 12 to 13 percent in the current year to March 2004, from 18 percent last year.

The profit warning put the company's shares into an immediate nose-dive and dragged other technology issues down as well.

Shares of Infosys ended flat at Rs 2,970.60 last week. The stock has lost 28 percent since early April compared to a 22 percent fall in Bombay's infotech index. Gopalakrishnan said though business travel had improved, the company was not revising its guidance.

"Right now, we are not changing any estimates. We are a little bit more optimistic," he said. Gopalakrishnan said Infosys continued to face pricing pressures as clients sought to cut costs in an economic slowdown.

He however said business from the telecom segment, which accounts for 16 to 17 percent of the firm's revenue, had improved. "The telecom sector is now becoming better. I think probably the bottom has been reached and now we see signs of improvement."

Infosys earns about 70 percent of its revenue from the United States and counts Bank of America and Cisco among its clients.

© Reuters