Highlights
Consolidated results for the quarter ended June 30, 2007
-- Income was Rs. 3,773 crore for the first quarter ended June 30, 2007; YoY growth was 25.1%
-- Net profit after tax was Rs. 1,079 crore for the quarter ended June 30, 2007; YoY growth was 34.5%
-- Earnings per share increased to Rs. 18.89 from Rs. 14.36 for the corresponding quarter in the previous year; YoY growth was 31.5%
Others
-- 35 new clients were added during the quarter by Infosys and subsidiaries
-- Gross addition of 7,004 employees (net 3,730) for the quarter by Infosys and subsidiaries
-- 75,971 employees as on June 30, 2007 for Infosys and subsidiaries
"As clients recognize the strategic imperative of global sourcing in an increasingly flat business world, the demand for large end-to-end players like Infosys continues to be strong," said S. Gopalakrishnan, CEO and Managing Director. "We continue to focus on being a partner of choice to our customers."
Business outlook
The company's outlook (consolidated) for the quarter ending September 30, 2007 and the fiscal year ending March 31, 2008, under Indian GAAP and US GAAP, is as follows:
Outlook under Indian GAAP - consolidated
Quarter ending September 30, 2007
-- Income is expected to be in the range of Rs. 3,952 crore and Rs. 3,993 crore; YoY growth of 14.5% - 15.7%
-- Earnings per share is expected to be Rs. 18.88 ; YoY growth of 12.7%
Fiscal year ending March 31, 2008
-- Income is expected to be in the range of Rs. 16,238 crore and Rs. 16,433 crore; YoY growth of 16.9% - 18.3%
-- Earnings per share are expected to be between Rs. 78.20 and Rs. 79.00; YoY growth of 13.0% - 14.1%
Outlook under US GAAP
Quarter ending September 30, 2007
-- Consolidated revenues are expected to be in the range of $ 974 million and $ 984 million; YoY growth of 30.6% - 31.9%
-- Consolidated earnings per American Depositary Share are expected to be $ 0.46; YoY growth of 27.8%
Fiscal year ending March 31, 2008
-- Consolidated revenues are expected to be in the range of $ 4.00 billion and $ 4.05 billion; YoY growth of 29% - 31%
-- Consolidated earnings per American Depositary Share are expected to be between $ 1.92 and $ 1.94; YoY growth of 25.5% - 26.8%
Awards and recognitions
Customer delight continues to be a key driver in Infosys' endeavor to deliver all-round excellence to clients. During the quarter, many clients commended Infosys' competence and reliability as a trusted transformation partner.
Sainsbury's, a leading UK food retailer with interests in financial services, selected Infosys as its IT Supplier of the Year for 2006 for the quality of delivery and excellence of its services.
The Royal Bank of Scotland (RBS) named Infosys as its Best Technology Supplier for 2007 for providing a high level of delivery confidence, which enabled it to introduce products to the market faster.
Sears Holdings, a leading US retailer, honored Infosys with two Partner in Progress awards for 2006, for information technology services and client support. The prestigious awards are presented annually to less than one percent of Sears Holdings' 41,000+ suppliers.
DaimlerChrysler named Infosys its IPS (International Procurement Services) Supplier of the Year 2006 in the information technology category. Infosys earned the award by consistently delivering on the four value drivers by which DaimlerChrysler measures its supply base: quality, cost, technology and supply.
Infosys also received recognition for its domain leadership. Readers of Waters, a leading financial technology publication, identified Infosys as the Best Outsourcing Provider for 2007. An independent analyst named Infosys as a leader in global information technology infrastructure outsourcing.
"Our drive to achieve customer delight has met with success, with clients expressing their appreciation of our service quality and delivery excellence," said S.D. Shibulal, Chief Operating Officer. "Deeper client engagement has resulted in clients other than the top ten growing sequentially by 9.3% during this quarter."
Expansion of services and significant projects
Infosys saw increasing demand for its business solutions and strong growth in service lines such as consulting, engineering services and package implementation. 35 clients were added during the quarter.
A telecommunications major in the UK aims to roll out services rapidly and realize value faster by deploying a new service management platform from Infosys. A global consumer electronics leader is using Infosys' technology and domain expertise in Manufacturing Execution Systems (MES) to reduce development costs and achieve faster time-to-market for new product launches. Infosys has been selected as the IT partner in a business transformation initiative undertaken by one of the world's largest food companies.
Infosys is partnering with an automotive manufacturer in North America to standardize production planning. A global professional services firm is using Infosys' help to define and build a workflow and collaboration tool for client-facing professionals.
An integrated power and security company worked with Infosys to integrate key business processes on a common platform for increased accuracy of customer data, reduced costs, and a unified customer view. A leading provider of diversified financial services used Infosys' help to better integrate data from its newly acquired subsidiaries for improved reporting and compliance. A leading electronics and electrical products manufacturer rolled out an Infosys solution to reduce warehouse maintenance and support costs. A leading UK retailer is working with Infosys to improve scalability and reduce costs by fulfilling customer orders across multiple brands and channels.
Infosys registered new wins in the financial services sector, including two of the largest banks in Europe.
In the UK, a leading housing services provider has selected Infosys to scope, design and implement a business transformation initiative. Infosys is modernizing the legacy IT systems of a leading utility infrastructure operator.
In Canada, Infosys is providing cost-effective best-shoring services to the country's largest telecom provider. Infosys is providing a suite of services including managed infrastructure and performance management to a wholesale distributor of high-end gifts.
Infosys Consulting Inc.
Working in synergy with Infosys business units, Infosys Consulting partnered with global businesses to chart their IT strategy for market leadership and improve the alignment between business and IT in their organizations.
A leading UK retailer focused on food and clothing is working with Infosys Consulting to achieve operational and strategic process improvements through focused solution themes for its IT development function. In the US, a retailer of home improvement and construction products is consolidating delivery across its stores by optimizing transportation and labor costs and a market leader in the grocery and general retail segments is developing a cost estimate and roadmap for replacing its legacy systems with a new Master Data Management solution from Infosys.
In a continuing engagement with one of the largest banking chains in the US, Infosys Consulting has proposed and implemented an organizational structure to help the group increase IT resource utilization and improve service levels.
Finacle
At the Banker Technology Awards, Finacle®, the universal banking solution from Infosys, received a 'Highly Commended' mention under the back office project category for retail banking.
Finacle added four new clients, including Emirates Bank, which has selected Finacle® core banking, Islamic banking, CRM and multi-channel alerts to completely revamp its technology infrastructure. During the quarter, 10 client projects went live on Finacle®.
Infosys BPO
Infosys BPO demonstrated its growing capability to undertake highly complex, analytical projects from large global corporations. Infosys BPO's Knowledge Services are helping a Fortune 100 telecom solutions provider to enhance its competitiveness. A telecom leader in Canada is working with Infosys BPO for high-end management reporting, commission payments reporting and procurement analytics.
Process innovation
During the quarter, Infosys applied for 6 patents in the US and India. With this, Infosys has filed an aggregate of 87 patent applications in both countries.
Liquidity and capital expenditure
Cash and cash equivalents, including investments in liquid mutual funds, as on June 30, 2007 was Rs. 6,442 crore (Rs. 3,434 crore as on June 30, 2006). During the quarter, Infosys incurred capital expenditure of Rs. 336 crore (Rs. 193 crore for the quarter ending June 30, 2006). Operating cash flows during the quarter ended June 30, 2007 were Rs. 902 crore (Rs. 464 crore for the quarter ended June 30, 2006).
"The sharp appreciation of the rupee against all major currencies impacted our operating margins during the quarter," said V. Balakrishnan, Chief Financial Officer. "However, our robust and flexible operating and financial model enabled us to maintain our net margins while absorbing the impact of appreciating currency, higher wages and visa costs. Liquidity has been further strengthened with cash and cash equivalents reaching US$ 1.6 billion."
Human resources
Infosys added 7,004 (gross) employees during the quarter and continues to invest in creating a strong training and recruitment engine to meet its growth objectives.
"Hiring continues to be strong and attrition is under control. We plan to hire 26,000 people for the year," said T. V. Mohandas Pai, Member of the Board and Head - HRD and Education & Research. "We continue to focus on expanding our global talent outreach. Our investments in training and education are giving us enhanced capabilities to make our clients more competitive."