Infosys FY 06 net rises 30 per cent; upbeat guidance for FY 07

Infosys Technologies kicked off the earnings season today with results, which were slightly lower than expectations. However, a very positive guidance for the current year and a liberal bonus announcement should keep the markets happy.

For the year 2005-06, Infosys has reported a net profit of Rs2,458 crore or Rs87.55 per equity share, higher by 30 per cent from Rs1,891 crore reported for the previous year. Full year revenues have increased 33.5 per cent to Rs9,521 crore as against Rs7,130 crore for the previous year.

For the quarter ended March 2006, the company reported a net profit of Rs673 crore or Rs23.84 per share, an increase of 20.6 per cent as compared to Rs558 crore reported for the same quarter of previous year. As against a net profit of Rs649 crore reported for the December 2005 quarter, last quarter profits have increased 3.7 per cent.

Revenues for the last quarter has increased 32.1 per cent to Rs2,624 crore from Rs1,987 crore for the previous year quarter. Revenue growth is at 3.6 per cent when compared to Rs2,532 crore reported for the quarter ended December 2005.

The board has recommended a bonus issue of equity shares in the ratio of one share for every share held. On the occasion of the 25th year of operations of the company, the board has also recommended a special dividend of 600 per cent or Rs30 per share.

Outlook for 2006-07
Infosys has given an aggressive outlook for the current financial year, on expectations of higher technology spending by key clients. For the full year 2006-07, the company expects revenues to rise between 28.7 per cent and 30.7 per cent to be in the range of Rs12,254 crore to Rs12,446 crore. Full year EPS is expected to be in range of Rs113.85 and Rs115.61 per share, a growth of 26.4 per cent to 28.4 per cent over the previous year.

Based on the full year guidance, Infosys stock is currently trading at 26 times forward earnings.