Original URL: http://www.theregister.co.uk/2007/04/13/infosys_slows/

Indian tiger starts to waddle

Infosys drops to fourth gear

By Mark Ballard

Posted in Financial News, 13th April 2007 16:00 GMT

Indian outsourcing giant Infosys has posted year end results that show how its growth is still constrained by a lack of resources.

At least that's the story the firm gave in January, and it happens to concur with the complaints emanating from its rival multinationals on the subcontinent.

It's only a spot of indigestion, though. Growth in sales and profits at Infosys might have slowed, but the tiger's not lost its appetite.

Infosys's gross profit grew 69 per cent year-on-year as of 31 March 2007, totalling $1.3bn. Still, the 05/06 gross figure of $908m had been a yearly increase of 76 per cent.

Revenue growth showed an almost identical disparity between 05/06 and 07/08, but it still boasted sales of $3.1bn, an increase of about 69 per cent, or nearly $1bn. Ditto earnings per share, which were up 67 per cent to $1.53.

The constraint has, apparently, been a lack of graduates. Though India churns out 14 million graduates every year - twice as many as the US - not nearly enough of those trained in engineering are good enough to hit the ground running when they are employed.

And signs point to growth slowing even further. Quarter on quarter revenue growth for the last slice of Infosys' fiscal year was a less impressive 45.5 per cent. Q3 revenue growth was 35 per cent, profit was up 30 per cent.

This time next year, the firm said it expects to have grown up to 30 per cent, while bringing in almost as much profit again. ®