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Infosys leads software charge with 84% growth in net - Views on News from Equitymaster
 
 
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  • Jan 11, 2000

    Infosys leads software charge with 84% growth in net

    Infosys has reported excellent results for the third quarter ended December 31, 1999. While the topline shot up by 62.4% over the corresponding period last year, the net level shot up 84%. The profit before interest, depreciation and tax rose by 80% primarily due to increase in other income from Rs 7.20 million to Rs 71.1 million. The software development expenses however went up by 77% to 1177.8 million.

    (Rs m) 3QFY2000 3QFY1999 Change
    Net Sales 2,264.0 1,394.5 62.4%
    Other Income 71.1 7.0 915.7%
    Expenditure 1,350.5 855.2 57.9%
    Interest - -  
    Depreciation 144.8 91.2 58.8%
    Profit before Tax 839.9 455.3 84.5%
    Tax 102.0 77.9 30.9%
    Profit after Tax 737.9 400.9 84.1%
    Net profit margin 32.6% 28.7%  

    The one possible reason for software development expenses increasing more than commensurately could be the fact that the company had plans to increase its software staff from 3500 as of March 1999 to 5000 by March 2000. A software engineer undergoes a three month period of training therefore an increase in staff may not increase the topline commensurately in the following quarter.

    Other income of Rs 71.1 million for the quarter included:

    • Rs 42 million of interest on deployment of funds raised through the issue of American Depository Shares,
    • Rs 7.20 million arising from sale of import licenses and
    • a loss of Rs 6.10 million arising from exchange differences on translation of foreign currency deposits kept abroad.

    If one were to exclude the above, the net profit for the current quarter was Rs 694.8 million an 84% increase over the comparable net profit from ordinary activities of Rs.377.4 million for the quarter ended December 31, 1998.

    The company’s Y2K revenues declined to 5.8% for the quarter ended December 1999 (from 9.4% in the previous quarter ended June 1999) while E-commerce revenues shot up to 15.6% of revenues (from 10.3%). The company added 23 new clients (64 year to date), of which 7 (14 year to date) are from the e–commerce area.

     

     

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