Stronger Re revises Infy's guidance

BANGALORE: Software services giant, Infosys Technologies announced at its third quarter, ending December, financial results, that it has revised its guidance for the next quarter in view of rupee appreciation. When the company gave its guidance at the end of the second quarter in October, it had set the annual target between Rs 7132-7160 crore (or $1555 to $1561 million) at Rs 45.91per dollar. However, with the rupee value appreciating to Rs 44.35, Infosys' dollar guidance has gone up by Rs 156 crore. The impact of this on the operating income for Q3 was 2.3 percent. Around 78 percent of the company's customer billings are in dollars and 98% of the billing comes from non-rupee currencies.

Elaborating on this, Mohandas Pai, the company's CFO said, "The difference is Rs 68 crore. So our revenues should have been up compared to the guidance given earlier. But it has gone lower. In the fourth quarter we have guidance for $452-$454 million at the conversion rate of Rs 43.27. If the rate had been Rs 45.61, the rupee rate would have been up by Rs 119 crore."

He said that the company's hedging strategy in this regard has been defensive. "We hedge to minimize the impact of adverse movements. " He attributed the currency movements to strong currency flows, reduced oil prices and increase in "invisibles" which include remittances, software and travel and services.

The company's President and CEO, Nandan Nilekani, said that the company had managed to maintain its operating margin in spite of the rupee appreciation.

The company's subsidiaries including Progeon clocked revenues of Rs 53 crore while Infosys Australia did business of Rs 78 crore. Infosys China and Infosys Consulting are still in the investment phase and turned in business of Rs 2.73 crore and Rs 7.54 crore respectively.

Prime Minister Manmohan Singh would formally inaugurate the new Infosys campus in Mysore in mid-February.