Infosys Technologies Ltd has posted a net profit of Rs 394.47 crore (Rs 3.944 billion) for the quarter ended June 30, 2004 as compared to Rs 278.12 crore (Rs 2.781 billion) for the first quarter ended June 30, 2003.

The company's total income increased from Rs 1,114. 42 crore (Rs 11.144 billion) in the Q1 2003 to Rs 1,489.38 crore (Rs 14.893 billion) in the quarter ended June 30, 2004.

Highlights

Consolidated results for the quarter ended June 30, 2004:

• Income was Rs 1,517.38 crore for the first quarter ended June 30, 2004, an increase of 38.61 per cent over comparable income for the corresponding quarter in the previous year.
• Net profit after tax for the first quarter ended June 30, 2004 was Rs 388.34 crore, an increase of 39.23 per cent over comparable net profit after tax for the corresponding quarter in the previous year.
• Earnings per share* from ordinary activities increased to Rs 14.54 from Rs 10.53 for the corresponding quarter in the previous year, an increase of 38.08 per cent. (* adjusted for the 3:1 bonus issue of shares distributed on July 6, 2004)
• 29 new clients were added during the quarter.
• Net addition of 2,305 employees for the quarter.
• 27,939 employees as on June 30, 2004.
• Infosys expects revenue to grow 39 per cent to 40 per cent in fiscal 2005.

The Infosys Results Factsheet

Business outlook

"We have seen strong revenue growth during the quarter," said Nandan M Nilekani, CEO, President and Managing Director. "Our robust and scaleable business model, along with our track record for superior execution, has enabled us to respond quickly to enhanced business opportunities in the market place."

The company's outlook (consolidated) for the quarter ending September 30, 2004 and the fiscal year ending March 31, 2005, under Indian GAAP and US GAAP, is as follows:

Under Indian GAAP – consolidated:

Outlook for the quarter ending September 30, 2004*

• Income is projected to be between Rs 1,631 crore and Rs 1,645 crore; YoY growth of 42 per cent to 43 per cent.
• Earnings per share is expected to be Rs 15.10; YoY growth of 33 per cent.
• Outlook for the fiscal year ending March 31, 2005*
• Income is projected to be between Rs 6,731 crore and Rs 6,772 crore; growth of 39 per cent to 40 per cent.
• Earnings per share is expected to be Rs 62.70; growth of 34 per cent. (* conversion 1 US$ = Rs 45.69) (* adjusted for the 3:1 bonus issue of shares distributed on July 6, 2004)

"We continue to see a stable pricing environment," said S. Gopalakrishnan, Member of the Board and COO. "The restructuring into Integrated Business Units has created multiple engines of growth with strong leadership."

Expansion of services and significant projects

The first quarter of this financial year got off to a promising start for the company, with the addition of 29 clients.

Infosys and its subsidiaries now have a total of 419 clients across the world. The company continued to partner with global corporations, assisting them in effectively using technology to derive focused and robust business solutions.

Infosys' strategic shift to being a business solutions provider to clients is yielding good results. The Retail Practice, which has introduced innovative solutions in the marketplace, has seen significant gains this quarter.

A major US retailer of toys, children's apparels and baby products chose Infosys to play a critical role in selecting and implementing new packages to transform its international merchandising.

One of the largest family footwear retailers in the US selected Infosys to upgrade its PeopleSoft applications - a task that Infosys completed about two weeks ahead of the mutually agreed upon deadline.

European retail companies are also experiencing the benefit of Infosys' solutions in increasing their competitiveness. In a deal won along with the company's strategic partner, Microsoft, a major European retailer chose Infosys' RFID (Radio Frequency Identification) solution this quarter.

An international vehicle rental organization based in Europe selected Infosys to enhance its existing systems and thereby improve productivity.

Infosys saw significant gains in the financial services sector this quarter. One of the top ten banks in the US selected Infosys and Progeon as strategic partners for IT and BPO. In another win, Infosys started working with a leading services company providing consultative services for the secondary loan market. Infosys is assisting the company in improving its IT infrastructure.

In the Asia-Pacific region, a subsidiary of one of the largest banking groups in Japan established a relationship with Infosys to build competitive applications and systems.

Two global corporations in the high-tech and  manufacturing industry began their partnership with Infosys during the quarter. A global leader in providing industrial hardware, software and services selected Infosys to support its business critical order processing systems worldwide.

One of the world's premier providers of IT equipment for power protection chose Infosys to help in the development and enhancement of its IT needs in its power infrastructure and management products.

Other wins in this space include a large technology company in the US, focusing on software products and services. This partnership leveraged Infosys' Global Delivery Model for new product development and upgrading of the company's package applications.

A leading provider of intelligent network software for enhanced IP services in the US extended its relationship with Infosys for the development of critical software applications.

The healthcare and insurance industry is increasingly adopting technology applications to enhance efficiency. A European multi-billion dollar insurance organization selected Infosys for the replacement of its existing global database. This project aims to achieve organisation-wide uniformity and reduced licensing costs.

A major actuarial consulting and information technology services company in the Asia-Pacific region sought Infosys' expertise in straight-through-processing from the internet for a series of their products in the insurance sector. Yet another win in this space is a leading health insurance company in the US.

In the Energy and Utilities industry, Infosys is partnering with one of the largest electric utilities systems in the US in a business consulting project. Infosys will work with the company to improve customer satisfaction, while reducing customer service operational cost.

A Europe-based international power and automation technology company is using Infosys consultants to conduct an IT strategy project designed to improve processes and technical functions of the current application portfolio. Infosys was also chosen by a leading utilities company in the US to develop a new application designed to enhance the level of its service and productivity.

The company strengthened its presence in the telecom industry in Europe, with the addition of a major Scandinavia-based mobile phone applications supplier. Infosys is working with this client to enhance its client interfaces on the web.

"Companies are seeking flexibility and alignment to business from their outsourcing initiatives," said Basab Pradhan, Head - World-wide Sales and Senior Vice President.

"We recently introduced a new approach to outsourcing called 'Modular Global Sourcing', which, while addressing these needs, will also optimize on cost, quality and time-to-market for the clients."

"We continue to benefit from the positive demand environment for offshore services," said S D Shibulal, Member of the Board and Head - World-wide Customer Delivery. "We have built systems and processes to scale up to the needs of the market place."