Outsourcer Infosys Reports 2Q Revenue Of $746 Million

In a sign that the furious growth of offshore IT outsourcing hasn't abated, India's Infosys Technologies Ltd. reported Wednesday that revenues and income in its just-ended second fiscal quarter jumped more than 40 percent.

Infosys, the second largest Indian software exporter, pointed to business deals with U.S. firms that helped drive the impressive results. The firm said revenues for the quarter ending Sept. 30 came in at $746 million -- up 42.4 percent -- while earnings per share expanded by a similar percentage. The Bangalore-based firm said it expects revenues for the fiscal year ending March 31, 2007, will be more than $3 billion.

Infosys and other offshore outsourcing firms have been enjoying rapid growth in recent months. "Our business model provides a compelling value proposition to clients in a flat world," said Nandan M. Nilekani, Infosys CEO and managing director, in a statement. "Our robust organic growth coupled with investments in various strategic areas helped us to grow faster in this environment."

In trumpeting the results, Infosys noted that it is enabling a leading U.S. cable provider to launch new features. Another important contract with a U.S. airline calls for Infosys to implement Oracle software to transform its finance functions.

The firm has been dropping smaller outsourcing contracts and concentrating on landing larger jobs.

Indian stock analyst Milind Pradhan of UTI Securities said the results "are a huge positive surprise" and surpassed expectations. Pradhan remained bullish on Infosys in the medium term.

The firm, which added net 7,700 employs in the quarter, now has more than 66,000 employees. The largest Indian IT services firm is Tata Consultancy Services.