In­fosys slashes fore­cast over ‘un­cer­tain’ fu­ture

Kuwait Times - - BUSINESS -

BANGALORE: In­dian soft­ware gi­ant In­fosys cut its an­nual earn­ings out­look for the sec­ond time in just three months yes­ter­day, send­ing shares down al­most three per­cent, as cau­tious clients rein in spend­ing. The Bangalore-based IT ser­vices ex­porter re­ported a 6.1 per­cent rise in quar­terly net prof­its year-on-year but re­vised down its sales fore­cast for the fi­nan­cial year, cit­ing an “un­cer­tain” fu­ture. In­fosys shares slumped 2.57 per­cent on the Bom­bay Stock Ex­change in morn­ing trade as a slug­gish global econ­omy hits In­dia’s out­sourc­ing in­dus­try hard with com­pa­nies in­clined to think twice be­fore rush­ing to sign con­tracts.

“Con­sid­er­ing our per­for­mance in the first half of the year and the near-term un­cer­tain busi­ness out­look, we are re­vis­ing our rev­enue guid­ance,” CEO Vishal Sikka said in a state­ment. In July, In­fosys re­duced its growth pro­jec­tion in US dol­lar terms for the fis­cal year 2016-17 from be­tween 11.8 per­cent and 13.8 per­cent to be­tween 10.8 and 12.3 per­cent. Yes­ter­day that was re­vised down again to be­tween 8.2 and 9.2 per­cent. In­fosys and ri­val Tata Con­sul­tancy Ser­vices ben­e­fited as In­dia be­came a back of­fice to the world with com­pa­nies tak­ing ad­van­tage of the coun­try’s skilled English-speak­ing work­force by sub­con­tract­ing work.

The com­pa­nies are seen as the bell­wether of In­dia’s flag­ship out­sourc­ing in­dus­try but a re­cent tight­en­ing of the purse strings has put pres­sure on prof­its with con­tracts be­ing post­poned and in some cases can­celled. In­fosys said con­sol­i­dated net profit for the three months to Septem­ber 30 was 36.06 bil­lion ru­pees ($542 mil­lion) com­pared with 33.98 bil­lion ru­pees for the same pe­riod last year. Rev­enues were 173.10 bil­lion ru­pees, slightly above a pre­dic­tion of 171.8 bil­lion ru­pees by a sur­vey of an­a­lysts done by Bloomberg News.

— AFP

BANGALORE: CEO of In­fosys Tech­nolo­gies, Vishal Sikka (right) and com­pany COO, Pravin Rao at­tend the press con­fer­ence held to an­nounce the IT com­pany’s Q2 re­sults in Bangalore yes­ter­day.

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