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To: Dealer who wrote (6934)	10/10/2000 4:15:49 PM
From: Dealer	Read Replies (1) \| Respond to of 65232

Infosys Reports Strong Q2 Software services provider Infosys Technologies Ltd. reported strong earnings this morning, citing revenue growth from its e-commerce business and new customers additions. Minimizing dot-com dependence and diversifying its customer base continue to be important factors for the company's success. By Mike Trigg October 10, 2000 India's juggernaut software services provider Infosys Technologies Ltd. (Nasdaq: INFY) bid a pleasant Namaste (Hindi for "hello") to shareholders this morning when it reported better than expected earnings, citing revenue growth from its e-commerce business and new customers additions. Infosys' fiscal second-quarter (ended September 30) net income was $32.8 million, or $0.25 per share, compared to $14.7 million, or $0.11 per share, in the year-over-year period. Those numbers include $2.1 million in other income stemming from exchange differences of foreign currency deposits. However, due to the fact currency gains are a one-time event, backing those numbers out leaves the firm with earnings of $30.7 million, or $0.23 per share. The Street consensus estimate called for the company to earn $0.20 per share. On the revenue side, the Bangalore, India-based company reported revenues of $97.9 million, an increase of 104% from $47.9 million in the same period a year ago. That put half-year revenues at $178.2 million, or a 103% increase from $87.7 million in the comparable period this time last year. Inside the numbers Within the earnings release there are several particulars worth mentioning. First, the company continues to show strong growth from Internet-related services. This part of the business is mostly drawn from brick and mortar companies entering into e-commerce projects that include everything from Web-enabling systems to B2B marketplaces. E-commerce services made up 31.4%of the revenue mix, compared to 28.7% in the first-quarter of this year. Those numbers provide some insight into the firm's dot-com dependence. Revenues from start-up companies were 9.5%, down from 10.9% in the previous quarter this year. Decreasing its exposure to dot-coms bodes well for the company, as IT consulting and services budgets have slowed. Strong growth among Fortune 1000 companies easily makes up for any lost business and mitigates the risk dot-coms carry. In a conference call today, the company indicated that over 21% of the 31.4% of Internet-related services came from brick-and-mortar companies. The Infosys customer mix continues to evolve adding 27 new clients this quarter to a total of 240. Customers include Cisco Systems (Nasdaq: CSCO), J.C. Penney (NYSE: JCP), and Eastman Chemicals (NYSE: EMN). The company has made a concerted effort to gain traction in the wireless and broadband space. Its relationship with optical equipment leader Nortel Networks (NYSE: NT) shows some traction, but telecommunications still only represents a small portion of total business. It drove 19.4% of total revenues, compared to 14.5% in the year-over-year period. Minimize risk and maximize growth There was also mention in today's call of lengthened sales cycles. That has been more and more of a problem for Internet-related services companies that depend on the Fortune 1000. Many brick-and-mortar businesses have taken a step back from e-commerce initiatives, as the rush to Web-enable certain business processes has lessened with the dot-com demise. This subject led the company's management to reemphasize its theme: minimize risk and maximize growth. It went on to say that it has focused on brick-and-mortar companies since its inception and sales cycles remain between 6 and 12 months. Overall, the company's theme seems consistent, as it does not rely on any one customer or industry for a large portion of sales. Taking a quick look at its customer breakup in the recent quarter, only two customers make up more than 5% of revenue and its top-10 clients provide 38% of total revenue. On the industry side, financial services lead the way representing 34% of total revenue.