FOCUS-Infosys Q2 profits jump, shares gain (Consensus 0.16,actual 0.22)
By Y.P.Rajesh
BANGALORE, India, Oct 8 (Reuters) - Booming overseas revenues lifted 1999/2000 (April-March) second quarter net profits at Indian software industry leader Infosys Technologies Ltd (NasdaqNM:INFY - news) and sent its shares soaring on the Bombay exchanges on Friday.
Infosys, which became the first Indian company to list on a U.S. exchange in March, posted a 131 percent jump in net profit to 657.1 million rupees ($15.10 million) in the three months to September 30 from 284 million rupees in the year-ago period.
``Our stragegic approach to the year 2000 opportunity has ensured top and bottomline growth despite a decline in year 2000 revenues,' Nandan Nilekani, managing director and president, said in a statement which also announced the company had added 22 clients to its customer list in the second quarter.
``New clients include e-business clients like Expense Vision, Petopia.com, Man.com,' it said.
Income from overseas operations soared to 2.05 billion rupees compared to 1.18 billion in the same quarter last year and total income leapt 82 percent to 2.18 billion from 1.20 billion.
``We are looking at upgrading our full year numbers based on the second quarter figures. The over 20 percent quarter-on-quarter bottomline growth is impressive,' said Hitesh Zaveri, analyst at ASK-Raymond James Securities India.
SHIFTING GEARS
Infosys said in a presentation over the Internet it was gearing up to focus on e-commerce work and planned to set up its first software development centre outside of India in Canada.
``The shift in the business towards e-commerce related work is rapid and the company is committed to creating knowledge infrastructure, acquiring people with technical skills in the e-commerce area, and e-invention which may require the company to incur business restructuring costs,' it said in a statement.
It said a provision of 35 million rupees was made during this quarter towards costs related to the shift to e-commerce.
The firm said second quarter e-commerce revenues rose to 10.3 percent of total income compared to 6.4 percent in the first quarter, while Y2K work fell to 9.4 percent from 12.1 percent.
Infosys shares were up 2.6 percent or 214.25 rupees at 8,460 on the Bombay exchange in Friday afternoon trade in a strong market buoyed by the re-election of Prime Minister Atal Behari Vajpayee's Hindu nationalist led coaltion.
The share price ranged between a high of 8,720 and a low induced by profit-taking at 8,000.15.
ADR WAGS THE DOG
The firm's shares have jumped about 170 percent on the Bombay exchange since its American Depositary Receipts (ADRs) were listed in March.
The soaring ADR price has led the domestic market, even though the company's market capitalisation on the U.S. exchange is a fraction of its market capitalisation on the Indian markets, analysts said.
The ADRs, which had a $34 offer price, closed in New York at $157 on Thursday, representing a premium of about 60 percent to the current local market price.
Each ADR represents half a local share.
Second quarter net income as per U.S. accounting standards was $14.72 million compared to $6.16 million in the year-ago period while revenues were $47.94 million compared to $28.24 million.
The firm earned 22 cents per ADR on a fully diluted basis compared to 10 cents in the year-ago period.
($1=43.495 rupees) |
