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Tech titan’s triple treat
Infy toasts net spurt with bonus, fat payout

Mumbai, April 14: Infosys Technologies Ltd, the technology bellwether, today announced a 1:1 bonus, a silver jubilee dividend of Rs 30 per share topped with a final dividend of Rs 8.50 per share for 2005-06, and strong financial results for the full-year ended March 31 that saw net profit after tax but before minority interest surge 31 per cent year-on-year to Rs 2,458 crore.

But Infosys’s net profit was a tad short of market expectations ' and this could weigh heavily on the skittish stock markets when they reopen on Monday.

Total revenues for the full year also rose 33.5 per cent to Rs 9,521 crore from Rs 7,130 crore in the previous year.

Profit points

Infosys reported a net profit (after exceptional items) of Rs 673 crore for the fourth quarter ended March 31 against Rs 558 crore in the corresponding period last year. Although net profit for the fourth quarter was below expectations due to higher wages, Infosys managed to clock an income of Rs 2,624 crore, a growth of 32 per cent over the corresponding previous period.

Growth guns

Most importantly, the tech titan forecast a robust growth in the first quarter of 2006-07 and the full year, emphasising that margins would not be crimped by strong competition and volatile foreign exchange markets. The guidance beats the street expectations.

For the quarter ending June 30, 2006, Infosys has projected an income range of Rs 2,793 crore to Rs 2,816 crore, a growth of 34.98 per cent to 35.9 per cent. Earnings per share for this period is expected to be between Rs 24.76 and Rs 25.20.

For the fiscal ending March 31, 2007, Infosys expects income to be in the range of Rs 12,254 crore to Rs 12,446 crore and EPS to be between Rs 113.85 and Rs 115.61. The analyst community is projecting an EPS of Rs 110 for this fiscal.

The senior management at Infosys is confident that the pricing environment may look up in the quarters to come.

Infosys, which was started in 1981 by seven software professionals, has certainly come a long way since its inception. N.R. Narayana Murthy, chairman and chief mentor, said, “This has been a happy, intense, rewarding and exhilarating journey of 25 years.” Adding in, Nandan Nilekani, CEO, president and managing director, who is one of the company’s co-founders said, “It took 23 years to reach the first billion dollars in revenues, while we reached the next billion dollars in 23 months.”

Focus on Europe

While North America now accounts for almost 64 per cent of the company’s income, the senior management of Infosys is of the belief that the share of Europe will rise from the present 23.3 per cent as there is a positive response there towards outsourcing.

For the year ended March 31, 2006, insurance, banking and financial verticals were largest contributors in industry terms, accounting for 36 per cent of the revenues. It was followed by manufacturing and telecom.

The company has 52,715 employees and 5,028 trainees. Its attrition rate has risen to 11.2 per cent from 9.7 per cent in March 2005.

Infosys and its subsidiaries added 38 clients during the quarter ended March 31. Infosys, along with Progeon, has begun a long-term BPO engagement in master data management, customer data integration and product information management for a global consumer electronics brand.

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