Infosys Q4 result ups net profit 13.7%

Software services major reports a net profit of Rs 18.2 bn,up from Rs 16 bn a year ago.

Infosys Technologies Ltd,India’s No 2 software services exporter,missed market estimates with a 13.7 per cent rise in quarterly profit (Q4 results) and said its human resources chief Mohandas Pai would quit the board,sending its shares 7 per cent lower.

Bangalore-based Infosys expected its dollar revenue to grow 18 per cent to 20 per cent for the year ending March 2012. Analysts had expected the company to forecast full-year revenue growth of 19-20 per cent.

There is pressure on margins. That is a combination of both cost pressures and rupee. Even the outlook is below market expectation,said Nitin Jain,Singapore principal investment manager at Kotak Mahindra’s fund management unit.

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The revenue guidance is broadly in line with expectation,but where we see some disappointment is lower earnings guidance which means there will be margin pressures.

Indian technology firms have seen a shake-up in recent months. In January,smaller rival Wipro replaced the chiefs of its key outsourcing business after struggling to keep up with peers.

Infosys shares are 6.8 per cent lower in a broader market down 1 per cent.

Infosys,larger rival Tata Consultancy Services ,and No. 3 Wipro have all stepped up hiring in the past few months,reflecting strong demand from clients.

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However,a possible appreciation of the rupee and pay increases for employees as they battle the likes of IBM and Accenture for orders and staff,will be key concerns for export-oriented firms.

Infosys,founded in 1981 by seven engineers with $250 borrowed from their spouses,reported a net profit of Rs 18.2 billion ($408.5 million) versus Rs 16 billion a year ago.

This compares with a Reuters poll forecast for net profit of Rs 18.81 billion for Infosys ,whose clients include Goldman Sachs ,BT Group and BP.

Ahead of the results,Infosys shares had lost 4 per cent this year versus a 2.5 per cent drop in the sector index and the main index ‘s 3.6 per cent fall.