This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Infosys Technologies Ltd. (INFY) on April 13, 2007.
Key Investors Issues
- Earnings per share were 45 cents compared to 27 cents a year ago.
- Net income was $259 million compared to $152 million a year earlier.
- Revenue increased 45.5% to $863 million from $593 million last year.
Fourth Quarter Highlights
Earnings per American Depository Share (ADS) increased 64.3% to 46 cents per share from 28 cents per share in the corresponding quarter last fiscal.
Operating margin dropped 100 basis points. This is primarily account of Rupee appreciation.
Gross margin came down as compared to December quarter, mainly because of Rupee.
Rupee has appreciated by 1.8%. The average Rupee-dollar rate was 44.53 in December quarter, and 43.75 this quarter, that has an impact on the gross margin and also operating margin.
The company had a dilution shareholding by virtue of 13 million shares which were exercised by employees in the last quarter of the financial year, which had an impact of about 3% on total issued share capital.
- The company has been investing in Europe.
- The company has $275 million relationships.
- The company has three clients contributing more than $100 million and one client contributing more than $200 million.
- The company added 34 new clients.
- Repeat business continues to be high at 93% and the DSOs are under control.
- The company added 5,992 employees.
- Attrition is up, 13.5% to 13.7%, but if involuntary attrition is excluded, it is flat.
- Utilization, excluding trainees, is 74%.
The operating margins came down by 1 percentage point mainly because of Rupee.
Non-operating income went up because the company has additional investable surplus and the yield went up. The average yield was 7% in December quarter on the investable surplus and it went up to 10% this quarter that resulted in additional non-operating income.
Provision for tax came down mainly because of a tax reversal of $29 million, which pertains to tax provisions made in earlier years for some of tax obligation in foreign jurisdiction.
The company has to rework the provisions made in excess of the liability and in one of the jurisdiction, the limitation period was over. It is a one-time event, excluding that, the top line growth and the bottom line growth is almost same.
- The company gave a guidance of 40 cents per share, actual EPS for March quarter was 46 cents per share. If the one-time tax reversal of 5 cents per share is excluded, actual EPS is 41 cents per share.
The top ten clients have been growing at 15.5% sequentially.
The company has seen good volume growth. Onsite volumes went up by 4%, offshore went up 3.4% sequentially, and total went up by 3.6%. The company has seen good increase in per capita revenues. Onsite per capita revenues went up sequentially by 1.7%, offshore went up by 1.4%, and blended went up by 1.7%.
Most of the subsidiaries have done well as per plan.
- Infosys BPO had revenue of $147 million with a net income of 21%.
- Infosys Australia did $100 million in revenues with a 16% net income.
- Infosys Consulting had a $47 million of revenue with a net loss of $25 million and that is still in the investment phase.
- Infosys China had $13 million revenue, which is $6 million less.
