Rupee depreciation adds to Infy cheer

BANGALORE: A combination of factors like rupee depreciation, decrease in Visa costs and a dip in Selling, General and Administrative expenses (SG & A), also added cheer to Infosys’s results that beat market expectations.

These factors led to a 2.5 per cent increase in the company’s operating margin.

“We had a decrease of in Visa costs by 1.17 per cent in Q2 and 1.4 per cent increase in profit from last quarter thanks to the rupee depreciation,” said V Balakrishnan, CFO, Infosys.

Compared to Q1 07, when the rupee value hovered at an average of Rs 45.69 against the dollar, the JAS quarter saw the value rise to Rs 46.26 against the dollar.

A drop in SG&A costs, thanks to the economies of scale, also contributed to positive margin impact.

Encouraged by the buoyant market for IT services, the company has revised its previous guidance of $2.91 billion to $3.02 billion for FY 07.

“We signed on 45 clients this quarter from verticals like financial services, telecom, and manufacturing,” said Nandan Nilekani, CEO and MD, Infosys. He ruled out any impact from a possible economic slowdown in the US.

© CyberMedia News