Infosys Profits Up 70% On Outsourcing Boom

Company president S. Gopalakrishnan will step up to become CEO as Nandan Nilekani transitions to co-chairman of the board.

Paul McDougall, Editor At Large, InformationWeek

April 13, 2007

1 Min Read

Indian tech and business services outsourcer Infosys Technologies said Friday that fourth-quarter earnings increased 64% while sales jumped 46% as more companies in the West sought to tap its low-cost, offshore workforce. For the quarter ended March 31, Infosys said revenue rose 46% year-over-year to $863 million. Per-share earnings on the company's American Depository Receipts increased 64% to 46 cents. Net income climbed 70% to $259 million.

In an interview, Infosys chief financial officer V. Balakrishnan said revenue was bolstered by the company's ability to increase prices by 2% to 3% for new outsourcing customers. "Demand is strong," said Balakrishnan.

For the full year 2006, Infosys said revenue increased 44% year-over-year to $3.09 billion, earnings per share rose 50% to $1.53, and net income climbed 53% to $850 million.

Looking ahead, Infosys said it expects to post revenue of between $904 million and $908 million in the current quarter ending June 30, with earnings per share at 41 cents. For the fiscal year ending March 31, 2008, the company expects revenue of between $3.95 billion and $4.02 billion.

Infosys also announced Friday that CEO Nandan Nilekani would step back to become co-chairman of the board effective June 22. The company said the move is voluntary and that he would be replaced as chief executive by S. Gopalakrishnan, who is currently the company's president and chief operating officer.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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