Infosys reports positive results

Indian services provider is "cautiously optimistic" for the future

Infosys raised its earnings and revenue forecasts for the fiscal year

An improvement in the overall business climate has prompted Indian outsourcer Infosys to raise its revenue and earnings forecasts despite posting a slight drop in quarterly profit today.

Revenue at the IT services firm reached $1.15bn (£720m), a 5.1 per cent decline on the same quarter a year ago but a 2.9 per cent increase on the previous quarter.

Infosys expects revenue to reach approximately $4.6bn (£2.9bn) for the full fiscal year, which signifies a one per cent drop on last year’s numbers.

While the results have surpassed Infosys’ own expectations, the company’s predictions for the future are rather conservative.

Reasons for this approach include the absence of significant market growth, high unemployment and currency volatility, said Infosys head of Europe BG Srinivas.

“The worse is likely to be over, but I will still view the future conservatively while being cautiously optimistic,” he told Computing.

Infosys was reported to be chasing some 12 to 15 outsourcing deals worldwide and Srinivas has confirmed that “a couple” of deals have been closed in the UK. But he said the sales processes are taking longer than usual as clients focus on supplier consolidation and strategy reviews.

Srinivas said his firm is also in talks with potential UK customers in the financial services sector, retail, energy and utilities for the provision of business process outsourcing services.

The National Outsourcing Association predicted a new wave for outsourcing in 2010 with overall industry growth of 10 per cent, but Srinivas is not convinced by the statistics.

“These numbers are a little too optimistic. Output is not going up across many sectors and budgets are not increasing, so I would leave any projections for the second quarter of 2010,” he said.

However, Infosys is still hiring 2,000 staff globally with a view to expanding its sales capability. The firm is also hiring senior technology architects and business consultants and expects that about 30 per cent of new recruits will be sourced in Europe.