Indian outsourcer Infosys posts 47 percent profit jump

Infosys Technologies, India’s second largest software and services outsourcer, reported big gains in both revenue and profit for the quarter ended June 30, reflecting continued strength in the Indian IT services industry, the company announced Tuesday.

Revenue for the period was $476 million, up 42 percent from $335 million in the same quarter last year. Net income increased by 47 percent to $122 million, from $83 million a year earlier, Infosys said. The results are based on U.S. generally accepted accounting principles (GAAP).

The company added 36 new clients during the quarter, taking the total number to 443. It also added about 3,000 new staff, for a total of 39,806 at the end of the quarter.

Infosys has forecast revenue in the range $2.06 billion to $2.08 billion for its current fiscal year, which ends March 31. Revenue for the last fiscal year was $1.6 billion.

The strong showing by Infosys, in Bangalore, reflects an overall buoyancy in the Indian outsourcing industry. India’s software and services exports were $17.2 billion in the fiscal year to March 31, up 35 percent from the previous year, according to the National Association of Software Companies (NASSCOM), in Delhi. Exports of software and services are expected to grow by between 30 percent and 32 percent in the current fiscal year, according to NASSCOM.

Tata Consultancy Services (TCS), India’s largest outsourcer, and Wipro, India’s third largest outsourcer, are also likely to post strong revenue and profit growth for the quarter to June 30, according to analysts. Both companies are expected to announce their results over the next two weeks.

India’s outsourcing industry, however, continues to be hit by the weak U.S. dollar and an increase in staff salaries. Infosys has maintained its profit margin despite absorbing annual salary increases and the adverse impact of a depreciating euro and pound sterling, Infosys said.

To boost revenue and get into higher margin businesses, some outsourcers including Infosys have ventured into IT consultancy as well as engineering services not directly related to information technology. Infosys announced earlier this year that it had tied up with French engineering company Alstom to design and implement power systems for Alstom.