Infosys sees stronger second half: BG Srinivas /Infosys remains cautious on economic environment-July 12, 2011

Infosys remains cautious on economic environment

Press Trust of India / Mysore July 12, 2011, 13:55 IST

Country's second largest software exporter Infosys today posted a 15.72% jump in its first quarter consolidated net profit year-on-year at Rs 1,722 crore, meeting street expectations, but expressed caution on the economic environment, especially in Europe.

"While this year is a normal year, the economic situation is still unstable. There are issues with Europe that are creating delays in decision making," Infosys COO SD Shibulal said.

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"While the IT budgets are frozen or are closed, there is a slight delay in the decision making and the customer reaction times are much shorter," he added.

The company had posted a net profit of Rs 1,488 crore for the same quarter of the previous fiscal (2010-11). On a sequential basis, the net profit is down 5.2%.

Shares of Infosys were trading at Rs 2,778, down 4.83% at 1.30 pm.

"Infosys results were marginally higher than our estimates. The company has likely taken a conservative view of the macro scene and the possible impact on pace of client spending, which giving its FY12 guidance," Kotak Securities senior vice president (Private Client Group Research) Dipen Shah said.

It has not seen any budget or pricing cuts from clients, as yet and the large deals and transformational deals continue to flow, which is encouraging, he added.