Infosys set to cross $3-b mark in a year

It took 23 years for Infosys to achieve the first billion dollars. The company took 23 months to earn $2 billion. Infosys will see its revenues exceed $3 billion in a year's time as it targets a growth exceeding 45 per cent for the current year.

Infosys, which declared Q2 results on Wednesday, said that it was seeing a stable pricing regime with an upward bias going forward. "We believe the current pricing environment is stable with an upward bias. New customers are coming in at 3-4 per cent higher billing rates," said its Chief Financial Officer, Mr V. Balakrishnan.

New business accounts for about five per cent of Infosys' revenues. The company was also getting 1-2 per cent higher rates from existing clients coming up for renegotiations, he said. Infosys, which saw a volume growth of 11.2 per cent, saw an improvement of 1.2 per cent in blended rates over the first quarter.

Further, Mr Balakrishnan said he expected margins to remain stable at current levels for the rest of the year. Infosys saw a 250 basis point rise in operating margins during the quarter to 28.6 per cent.

About 1.1 per cent gain in OPM was due to reduced visa cost, while 0.9 per cent was due to rupee depreciation and 0.5 per cent from the economies of scale benefit and reduction of selling, general and administrative costs, he said. Infosys has taken a forward cover to the tune of $373 million, he said.

To hire more

Infosys expects to hire 3,000 more people for the year in addition to the previously projected 25,000 hires, said Mr Mohandas Pai, Director, HR. The company saw attrition increasing marginally to 12.9 per cent. Infosys expects to add about 5,700 people in Q3 and some 3,800 people in Q4 on a gross basis, he said. Further, Mr Pai said the wage hike of 12-15 per cent will continue going forward and Infosys will effect the next wage hike in April 2007.

Mr S. Gopalakrishnan, President and COO, said the company saw high growth in verticals such as banking and capital market during the September quarter. New services like testing, infrastructure maintenance services and package implementation among others are also growing well, he said.

The top 10 customers of Infy grew 17 per cent quarter-on-quarter, while the top 25 clients grew in line with the company average. Infosys saw a strong contribution from geographies like Australia, while European revenues saw a marginal dip, which Mr Gopalakrishnan termed as seasonal. Europe accounted for 25.8 per cent of Infy's Q2 revenues.

Infosys reported a utilisation rate of 80.3 per cent for its services business and targets 77-80 per cent, he said.

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