BANGALORE, India (AFP) - India's second-largest software exporter, Infosys Technologies, said quarterly net profit jumped 49 percent, well ahead of market expectations, as outsourcing orders rose sharply.
Net profit at the Nasdaq-listed firm for the three months to September totalled 4.5 billion rupees (97.1 million dollars) on revenues up 52 percent at 17.5 billion rupees. Profit forecasts ranged 4.21-4.30 billion rupees.
"This quarter has seen a surge in offshore growth," said Nandan Nilekani, chief executive officer. "Offshoring has become a mega-trend ... to increase their (companies') global competetiveness."
Old economy sectors such as automobiles, pharmaceuticals, power and telecom service providers were showing greater interest in outsourcing.
"Where work will be done in the future will be different from in the past," Nilekani said, referring to a global trend to farm out work to cheaper locations such as India and China.
Bangalore-based Infosys, the first of the big Indian software firms to report quarterly results, projected full-year to March 2005 earnings growth of 43 percent. It also raised full-year revenue guidance to 71.3-71.6 billion rupees, a gain of 48 percent, from an earlier forecast of 67.3-67.7 billion rupees.
The company, which derives 65 percent of its revenues from the United States, is known for its conservative guidance to financial markets.
Infosys shares on the Bombay Stock Exchange were up 1.88 percent or 31.75 rupees at 1,717.00 in mid-afternoon trade, bucking a weaker overall market that was down 0.59 percent.
"The results of Infosys are impressive ... and are also an indication for the overall prospects of the software sector," said Vijay Saraf, chief operating officer of Centrum Financial Securities.
Infosys added 5,010 employees during the three months, the most new hires in any quarter ever, after hiring 5,000 during the previous financial year, said Infosys chief operating officer S. Gopalakrishnan.
The recruits boosted total staff strength to 32,949.
"Sourcing strategically from service providers has become the outsourcing approach for many companies and we see this trend across all industries," said global sales head Basab Pradhan.
Infosys, the first Indian information technology company to break the billion-dollar mark for annual revenues in the last financial year, announced an interim dividend of five rupees per share.
Offshore projects, or work outside the client's region, went up almost two percentage points to 50.2 percent during the second quarter while onsite revenues declined by the same figure to 49.8 percent.
The company, the first Indian IT firm to list its shares overseas, said "differentiation" will mark its growth strategy going forward during a time of increasingly cutthroat competition.
"We continue to focus ... on differentiation which is the key to higher client value," Nilekani said, a reference to new businesses launched by Infosys as part of a drive to set itself apart from competitors.
In April, it began a technology consultancy business in the United States. It has launched another unit, Modular Global Sourcing, that aims to help companies make operational and technological improvements. It said it had earmarked 32 million dollars for expansion during the rest of the year.
Infosys' results were set to be followed late Tuesday by Tata Consultancy Services, India's leading IT firm which made its stock market debut in August, and third-ranked Wipro Ltd, due Friday.