Infosys looks for growth in uncertain times

by CXOtoday Staff    Oct 12, 2011

India’s second largest information technology services company Infosys Ltd., reported good set of numbers for 2QFY12 today.

The company reported 8.2 percent QoQ growth in its sales and a 10.7 percent QoQ increase in its net profit.

The management however showed some signs of concerns due to the uncertainty in the economic scenario from clients in North America and Europe.

SD Shibulal, CEO, Infosys in a media conference stated that the company remains cautious on the worries arising out of the prevailing situation in Europe and the US

The IT major garners a major percentage of its revenues from clients in North America and Europe. High unemployment and slow recovery have been a major cause of concern in the US, while the sovereign debt crisis in Europe could impact the financial outlook of many companies.

The software company saw a growth of 10.1 percent QoQ in sales from North America, while sales from Europe grew by 4.1 percent QoQ during the quarter. However, revenues from India continued to fall and witnessed a decline of 8.4 percent QoQ during the quarter. Business from the rest of world grew by 9.1 percent QoQ.

Infosys marginally lowered its revenue outlook for the FY12 to between USD 7.08-USD 7.2 billion, citing unfavorable currency movements.

A report released today by stock broking firm Angel Broking, states that the management commentary at Infosys has turned cautious as the company is witnessing delays in decision making, especially for long-term deals. “We expect the company to record USD revenue growth of 19.3 percent and 14.1 percent YoY in FY2012 and FY2013, respectively,” the report states.

V Balakrishnan, CFO, Infosys said that the company expected global recovery to be slow and sectors like banking, retail and utility could provide business opportunities for the company.

For this quarter, the life sciences and healthcare segment garnered a 26.2 percent QoQ growth in sales, while the BFSI segment recorded a healthy growth of 7.9 percent QoQ. Revenues from energy, manufacturing and communications segments saw a growth of 8.2 percent, 7.7 percent and 6.2 percent QoQ respectively during the quarter.

The company added 45 new clients during the quarter taking the total number of active clients to 647.