Infosys Technologies Ltd, India's second-largest software exporter, reported a 21 percent jump in quarterly profit on Friday and forecast better earnings ahead on an outsourcing boom.
Bangalore-based Infosys, the showpiece of India's thriving services sector, expects "stable prices with an upward bias" in the year to March 2007, with business from Europe growing faster than other revenue streams.
It plans to hire almost 50 percent more staff this year, adding a gross 25,000 to a payroll that suffered an attrition rate of over 11 percent in the quarter.
"New businesses are coming in at higher rates. I think we are getting 3-4 percent higher," T.V. Mohandas Pai, chief financial officer, told Reuters.
Operating margin, at 27.5 percent in the fourth quarter, is expected to be stable this year, he said.
Nasdaq-listed Infosys forecast earnings per share would rise 26-28 percent in the April-June quarter from a year earlier, a growth rate it expects to show for the full year.
"It took us 23 years to reach the first billion dollars in revenue while we reached the next billion dollars in 23 months," Chief Executive Nandan Nilekani said.
Infosys, which counts ABN Amro Bank among its clients, has helped put India's software industry, which employs a growing army of low-cost, English-speaking engineers, on the global map. Rivals include Tata Consultancy Services Ltd and Wipro Ltd.
Infosys earned a net profit of 6.73 billion rupees ($148.9 million) for the fiscal fourth-quarter, versus a revised 5.58 billion a year-ago, and 6.49 billion in the third quarter.
Sales rose 32 percent to 26.24 billion rupees. The result undershot forecast net profit of 6.89 billion rupees in a Reuters poll of 10 analysts.
Infosys won more overseas business, but margins were squeezed as salaries rose up to 8 percent on year and the rupee appreciated nearly 1 percent against the dollar in the quarter.
The company has forecast April-June earnings per share would rise 26.1-28.4 percent from a year ago, with revenue growing at 34.8-35.9 percent. Full-year earnings per share should rise 26.4-28.4 percent with revenue growing 28.7-30.7 percent. The company added 38 customers in the past quarter taking the number of active clients to 460. Nine clients contributed more than $50 million each in annual revenue.
The firm said it was in talks to buy out investment bank Citigroup's holding in Progeon, the back-office arm of Infosys.
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