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Infosys says outsourcing profits rose by 47 percent

India's second-largest outsourcing company, Infosys Technologies Ltd, said yesterday its net profit for the last quarter rose 47 percent to US$122 million.

The company, which subcontracts work in India for Western firms -- from software engineering to back-office work -- attributed the growth to strong demand for such outsourcing and increased corporate recognition among global clients.

The fiscal first quarter's profit rose considerably from the US$83 million earned in the comparable quarter a year ago, according to the company's financial results published under US Generally Accepted Accounting Principles. That came out to be US$0.45 per share, higher than the company's forecast of US$0.44.

Total sales rose to US$476 million, up 42 percent from US$335 million in the same quarter a year ago. That beat the company's earlier sales estimate of between US$459 million and US$463 million.

"Infosys continued to build a leaner, more scalable and aligned organization to handle greater business complexity," Nandan Nilekani, CEO, president and managing director, said in a statement in the southern Indian city of Bangalore.

Many Western firms have cut costs by farming out software work, engineering design and customer service to countries such as India, where wages are lower and skilled workers plentiful.

The company hired 4,537 white-collar workers during the quarter, 1,481 of them to replace those who left. Total staff strength stood at 39,806.

Infosys also gained 36 new clients during the quarter.

Infosys expects revenues for the next quarter to range from US$506 million to US$509 million, and those for the full year till March 2006 to be between US$2.06 billion and US$2.09 billion.

Wage increases and the depreciation of the euro -- which reduces the rupee value of the euro-denominated portion of its income -- were a matter of concern, but the company was able to maintain its profit margins, chief financial officer T. V. Mohandas Pai said.

India earned US$17.2 billion from offshore outsourcing during the fiscal year ended March last year.
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