Infy had reported its results for the first quarter of FY 10 and it was able to come up with numbers to beat it's own estimates. The revenues increased by around 13% and the profits reported rose by around 18%. The total revenues for the quarter stood at 5472 crore and the profits reported were at 1527 crore. However, on a sequential basis, revenues declined by around 2.9% and the profits declined by 5.3%.
The company reported that it was able to retain business amid the global recession by paring prices and winning new orders. Infosys has been looking at acquisitions for long and it had re iterated the same. For the outsourcing companies, the winds are blowing currently from both front and back.
The front winds are coming from Obama administration which is hell bent on reducing the job losses from oursourcing. The back winds are from those corporates who are still standing after one of the worst economic downturn and are gasping for survival. They are looking at increased outsourcing to reduce costs.
Infosys has given a range of 4.45 billion USD and 4.52 billion USD for it's expected revenues in the financial year FY 2010. Basically it has increased the lower end of the estimates marginally from the ones that it had provided earlier.
Forrester research inc, Massachusetts based research company had forecasted that the US information technology market would shrink by 5% this calendar year and the global IT spending will decline by almost 11%. However, it was also expecting a very strong recovery from late 2009 and in 2010.
Infosys has won some big contracts recently. One was from Telstra, Australia's largest phone company which awarded a 352 million USD contract to Infy and EDS.
To contact the equity analyst on this story: Arun Gopalan in Chennai at Arun@hbjcapital.com