Infosys sales down as offshoring feels the pinch

Infosys revenue and profit were down

Indian IT suppliers are increasingly feeling the pinch of the recession, as Infosys reported a 1.8 per cent year-on-year decline in sales and a 2.6 per cent drop in profit.

Fourth quarter revenue at the offshoring giant was $1.12bn (£750m), with net income of $321m (£215m). Annual revenue of $4.66bn (£3.1bn) was up 11.7 per cent, with net income of $1.28bn (£857m) up 10.1 per cent – figures that are better than many IT services firms over the past year but below the sort of annual growth rates experienced by Indian firms prior to the downturn.

Infosys chief executive S. Gopalakrishnan said the company is not immune to the economic climate affecting its customers.

“Many of our clients are impacted by the financial crisis and are looking to us to help them reduce their expenses and optimise their businesses,” he said.

“Our services, solutions and business model are well suited to help them in this environment. We are focusing on enhancing our business and investing smartly for the future.”

Infosys expects the impact of the recession to continue, forecasting revenue for its current financial year to decline by between 6.7 per cent and 3.1 per cent.

“We improved our operating margins during fiscal 2009 despite a very difficult global economic environment combined with highly volatile currency markets,” said chief financial officer V. Balakrishnan.

“We have a strong balance sheet with cash and cash equivalents of over $2bn.”