India’s second-largest outsourcer, Infosys Technologies, has posted strong growth in revenue and profit for the quarter ended December 31, 2006, despite pressure on margins because of appreciation of the Indian Rupee against all major currencies.
Infosys also revised on Thursday its guidance for the fiscal year ending 31 March. The company expects full year revenue to be $3.09 billion (£1.59bn), up 43.6 per cent over the previous fiscal year. In October, Infosys said revenue would cross $3.0bn (1.54) for the full year, up by 40.6 to 41.1 per cent over the previous fiscal year.
India’s popularity as an offshore outsourcing destination is on the upswing, although hiring good staff has become difficult. A number of Indian outsourcing companies, including Infosys, are setting up operations in China and Eastern Europe to take advantage of the availability of low-cost staff in these locations.
The company’s revenue for the quarter was $821 million (£421m), up 46.9 per cent from revenue of $559m (£287m) in the same quarter last year. Infosys profits also rose 52 per cent to $218m (112m) from $143m (£73m) in the same quarter last year.
The results are based on US generally accepted accounting principles (GAAP).
India could sustain its global leadership position in offshoring and grow its IT and business process outsourcing (BPO) industries at an annual rate of over 25 per cent to generate export revenues of about $60bn (£31bn) by 2010, according to a report by management consulting firm McKinsey and the National Association of Software and Service Companies (NASSCOM) in Delhi. But to achieve these revenue targets, the country will have to work around a projected shortage of 500,000 staff by 2010, the report said.
The company had a net addition of 3,282 employees during the quarter, taking the total number of employees to 69,432 as of December 31. The company also added 43 new clients during the quarter.