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Infosys CEO S. Gopalakrishnan, has said that they are seeing “greater demand for services from our

clients.” The supply of quality talent however, continues to dwindle, with the continued economic

recovery and increasing competition.

Just a few days ago, on the 16th of June, outsourcing firms including Tata Consultancy Services

(NSE:TCS), Wipro (NYSE:WIT), Cognizant (NASDAQ:CTSH) and Infosys, all lodged a complaint against

fellow outsourcer, Accenture (NYSE:ACN), due to violation of campus recruitment norms in India. Indian

outsourcing companies often recruit employees out of campuses in India as a recruitment strategy. The

companies begin placement by the final semester of the school year in accordance with Nasscom.

Accenture, however, has been accused of sending placements out a semester ahead of its competitors,

earning the ire of fellow outsourcing companies including Infosys.

Aside from that, the company has also implemented a new program called Green Channel, in an effort to

hire back ex-employees of the company, thereby reducing time spent on training new employees.

Infosys, last year is reported to have hired 20,000-22,000 people who were from non-computer science

backgrounds. For the last quarter, the company hired only 1,026 staff, which is comparably the slowest

pace of hiring in the last four quarters.

Attrition Problems

It is not only hiring that has affected Infosys’ margins, efforts to cut back on attrition within the

company haslead to increased wage hikes among employees.”Companies have given an average wage

hike of 12-14 percent offshore and 2-3 percent onsite to be competitive in an improving demand

scenario,” according to an analyst with a Mumbai-based brokerage.

This has however, contributed to the company falling short in its numbers. The company’s attrition rate

has shot up to 15.8% as compared to 11.1% one year ago and 13.4% last quarter. There were a total of 

7,833 employees who quit the company.

According to company Board Member T.V. Mohandas Pai, “with the market opening up, attrition has

increased this quarter. We have taken several steps, including a compensation hike to reduce it.” He

further adds that, “one of the steps we are taking to reduce attrition is to enhance lateral hiring.” 

Economic Problems

 “Profitability was also hurt by currency volatility, a 30.4% higher tax charge and lower billing rates”, said

Chief Financial Officer V. Balakrishnan. A stronger rupee and the 1.6% fall in billing rates have affected

the company’s operating margins. Based on currency, the dollar rose 8% against the euro and 5%

against the pound, mainly due to the European debt crisis, affecting the dollar revenues of the company.

Currently the company’s second largest market after the US, Europe’s debt crisis has affected the

outlook for demand and the company’s margins. Company COO S.D. Shibulal, has said in a statement

with Reuters that, with Europe, “there are still concerns, local concerns as well as tail effects of the

previous recession. Of course, Europe entered the recession late and we believe it will also come out

late.”We believe that Europe will lag behind the U.S. for may be another quarter or two.

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With the release of the Infosys’ quarter results; it would seem at this point that India’s number two

exporter is lagging behind its current rivals. Judging from the results released by fellow Indian

outsourcer, Tata Consultancy Services, Infosys will need to play catch up for the next quarter.

Author: Audrey B.

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Detailed Result

Scrip Code : 500209  Company : INFOSYS TECHNOLOGIES LTD.

  TypeAudited

Date Begin01-Apr-09

Date End31-Mar-10

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DescriptionAmount(Rs.

million)

Interest Earned/Net Income from sales/services211,400.00

  Cost of Sales/Services

-115,590.00Software Development Expenses -115,590.00

Gross Profit95,810.00

General Administrative Expenses-12,470.00

Selling and Distribution Expenses-9,740.00

Depreciation-8,070.00

Operating Profit Before Interest65,530.00

Interest0.00

  Exceptional Items90.00

Provision for Investments 90.00

Operating Profit After Interest and Exceptional Items65,620.00

Other Income9,100.00

Profit (+)/ Loss (-) from Ordinary Activities before Tax74,720.00

Tax-17,170.00

Net Profit (+)/ Loss (-) from Ordinary Activities after Tax57,550.00

  Extraordinary Items480.00

Income from sale of investments, net of taxes 480.00

Net Profit58,030.00

Equity Capital2,870.00

Face Value (in Rs)5.00

Reserves217,490.00

EPS before Extraordinary items (in Rs)

  EPS after Extraordinary items (in Rs)

Basic EPS after Extraordinary items 101.22

Diluted EPS after Extraordinary items 101.10

Number of Public Shareholding374,864,267

Percentage of Public Shareholding65.32

Promoters and Promoter Group Shareholding

Pledged / Encumbered

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Number of Shares0

Percentage of Shares (as a % of the total shareholding of promoter 

and promoter group)0.00

Percentage of Shares (as a% of the total share capital of the company)0.00

Non-encumbered

Number of Shares92,084,978

Percentage of Shares (as a% of the total shareholding of promoter &

prom group)100.00

Percentage of Shares (as a % of the total share capital of the

company)

INFY)

70.52USD 3.21(4.77%) 

On Oct 2

BALANCE SHEET

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PERIOD ENDING 31-Mar-09 31-Mar-08 31-Mar-07

Assets

Current Assets

Cash And Cash Equivalents 2,167,000 2,058,000 1,409,000

Short Term Investments - 18,000 6,000

Net Receivables 872,000 1,020,000 665,000

Inventory - - -

Other Current Assets 81,000 33,000 18,000

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Total Current Assets 3,120,000 3,129,000 2,098,000

Long Term Investments - 2,000 37,000

Property Plant and Equipment 920,000 1,022,000 738,000

Goodwill 135,000 150,000 128,000

Intangible Assets 7,000 25,000 20,000

Accumulated Amortization - - -

Other Assets 106,000 98,000 33,000

Deferred Long Term Asset Charges 88,000 66,000 19,000

Total Assets 4,376,000 4,492,000 3,073,000

Liabilities

Current Liabilities

Accounts Payable 120,000 284,000 282,000

Short/Current Long Term Debt 22,000 29,000 -

Other Current Liabilities 395,000 258,000 73,000

Total Current Liabilities 537,000 571,000 355,000

Long Term Debt - - -

Other Liabilities 48,000 11,000 1,000

Deferred Long Term Liability Charges 7,000 - -

Minority Interest - - -

Negative Goodwill - - -

Total Liabilities 592,000 582,000 356,000

Stockholders' Equity

Misc Stocks Options Warrants - - -

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Redeemable Preferred Stock - - -

Preferred Stock - - -

Common Stock 64,000 64,000 64,000

Retained Earnings 3,618,000 2,817,000 1,871,000

Treasury Stock - - -

Capital Surplus 672,000 718,000 692,000

Other Stockholder Equity (570,000) 311,000 90,000

Total Stockholder Equity 3,784,000 3,910,000 2,717,000

Net Tangible Assets $3,642,000 $3,735,000 $2,569,000

Infosys Technologies Limited(INFY)

INCOME STATEMENT

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PERIOD ENDING 31-Mar-09 31-Mar-08 31-Mar-07

Total Revenue 4,663,000 4,176,000 3,090,000

Cost of Revenue 2,699,000 2,453,000 1,777,000

Gross Profit 1,964,000 1,723,000 1,313,000

Operating Expenses

Research Development - - -

Selling General and Administrative 590,000 564,000 458,000

Non Recurring - - -

Others - 8,000 3,000

Total Operating Expenses - - -

Operating Income or Loss 1,374,000 1,151,000 852,000

Income from Continuing Operations

Total Other Income/Expenses Net 101,000 175,000 84,000

Earnings Before Interest And Taxes 1,475,000 1,326,000 936,000

Interest Expense - - -

Income Before Tax 1,475,000 1,326,000 936,000

Income Tax Expense 194,000 171,000 84,000

Minority Interest - - (2,000)

Net Income From Continuing Ops 1,281,000 1,155,000 850,000

Non-recurring Events

Discontinued Operations - - -

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Extraordinary Items - - -

Effect Of Accounting Changes - - -

Other Items - - -

Net Income 1,281,000 1,155,000 850,000

COMPETITORS

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DIRECT COMPETITOR COMPARISON  

INFY SAY Pvt1 Pvt2 Industry

Market Cap: 40.27B 1.33B N/A N/A N/A

Employees: N/A N/A 108,0001 N/A N/A

Rev. Growth (ttm): N/A N/A N/A N/A N/A

Revenue (ttm): N/A N/A 5.72B1 N/A N/A

Gross Margin (ttm): N/A N/A N/A N/A N/A

EBITDA (ttm): N/A N/A N/A N/A N/A

Oper. Margins (ttm): N/A N/A N/A N/A N/A

Net Income (ttm): N/A N/A 1.26B1 N/A N/A

EPS (ttm): N/A N/A N/A N/A N/A

PE (ttm): N/A N/A N/A N/A N/A

PEG (ttm): 1.42 N/A N/A N/A N/A

PS (ttm): 7.63 0.58 N/A N/A N/A

SAY =

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Pvt1 = Tata Consultancy Services Limited

Pvt2 = Wipro Technologies (privately held)

Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $1,281,

CASH FLOW

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PERIOD ENDING 31-Mar-09 31-Mar-08 31-Mar-07

Net Income 1,281,000 1,155,000 850,000

Operating Activities, Cash Flows Provided By or Used In

Depreciation 165,000 157,000 118,000

Adjustments To Net Income 192,000 (47,000) (2,000)

Changes In Accounts Receivables (139,000) (247,000) (208,000)

Changes In Liabilities 93,000 178,000 108,000

Changes In Inventories - - -

Changes In Other Operating Activities (183,000) (47,000) (4,000)

Total Cash Flow From Operating Activities 1,409,000 1,149,000 862,000

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures (285,000) (374,000) (336,000)

Investments 15,000 (16,000) 165,000

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Other Cashflows from Investing Activities (20,000) (33,000) (163,000)

Total Cash Flows From Investing Activities (290,000) (423,000) (334,000)

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid (559,000) (209,000) (336,000)

Sale Purchase of Stock 14,000 17,000 277,000

Net Borrowings - - -

Other Cash Flows from Financing Activities - 6,000 4,000

Total Cash Flows From Financing Activities (545,000) (186,000) (55,000)

Effect Of Exchange Rate Changes (465,000) 115,000 41,000

Change In Cash and Cash Equivalents $109,000 $655,000 $514,000

Narayana Murthy Profile

Born: August 20, 1946

Achievement: One of the founders of Infosys

Technologies Limited; Chosen as the World

Entrepreneur of the Year - 2003 by Ernst and

Young

Narayana Murthy is the Non-Executive Chairman

and Chief Mentor of Infosys Technologies Limited.

He is a living legend and an epitome of the fact that

honesty, transparency, and moral integrity are not

at variance with business acumen. He set new

standards in corporate governance and morality

when he stepped down as the Executive Chairman

of Infosys at the age of 60.

Born on August 20, 1946, N.R. Narayana Murthy is a B.E. Electrical from University of Mysore (1967) and

M.Tech from IIT Kanpur (1969). Narayan Murthy began his career with Patni Computer Systems in Pune. In

1981, Narayana Murthy founded Infosys with six other software professionals. In 1987, Infosys opened its first

international office in U.S.A.

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With the liberalization of Indian economy in 1990s, Infosys grew rapidly. In 1993, the company came up with its

IPO. In 1995, Infosys set up development centers across cities in India and in 1996, it set up its first office in

Europe in Milton Keynes, UK. In 1999, Infosys became the first Indian company to be listed on NASDAQ. Today

(in 2006), Infosys has a turnover of more than $ 2billion and has employee strength of over 50,000. In 2002,

Infosys was ranked No. 1 in the "Best Employers in India 2002" survey conducted by Hewitt and in the Business

World's survey of "India's Most Respected Company." Conducted in the same year.

Along with the growth of Infosys, NarayanaMoorthy too has grown in stature. He has received many honors and

awards. In June 2000, Asiaweek magazine featured him in a list of Asia's 50 Most Powerful People. In 2001,

Narayana Murthy was named by TIME/CNN as one of the 25 most influential global executives. He was the first

recipient of the Indo-French Forum Medal (2003) and was voted the World Entrepreneur of the Year - 2003 by

Ernst and Young. The Economist ranked Narayana Murthy eighth on the list of the 15 most admired global

leaders (2005) and Narayan Murthy also topped the Economic Times Corporate Dossier list of India's most

powerful CEOs for two consecutive years - 2004 and 2005.

Infosys company profile

1. Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981by seven people with US$ 250. Today, we are a global leader inthe “next generation” of IT and consulting with revenues of over US$ 4 billion.

Infosys defines, designs and delivers technology-enabledbusiness solutions that help Global 2000 companies win in aFlat World. Infosys also provides a complete range of servicesby leveraging our domain and business expertise and strategicalliances with leading technology providers.

Our offerings span business and technology consulting,application services, systems integration, product engineering,custom software development, maintenance, re-engineering,independent testing and validation services, IT infrastructureservices and business process outsourcing.

Infosys pioneered the Global Delivery Model (GDM), whichemerged as a disruptive force in the industry leading to the riseof offshore outsourcing. The GDM is based on the principle of taking work to the location where the best talent is available,where it makes the best economic sense, with the least amountof acceptable risk.

Infosys has a global footprint with over 50 offices anddevelopment centers in India, China, Australia, the CzechRepublic, Poland, the UK, Canada and Japan. Infosys and itssubsidiaries have 105,453 employees as on September 30,2009Infosys takes pride in building strategic long-term clientrelationships. Over 97% of our revenues come from existing

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Infosys Technologies

Infosys, India's No. 2 software services exporter, grew nearly 50% in 2004, to $1.59 billion 

in revenues. And it's well on its way to cross $2 billion this year. Progeon, the unit that 

manages business processes, is doubling every year and expects to reach $80 million in 

sales this year. Thrilled investors in India value it more than rival Tata Consultancy 

Services, which is two-fifths bigger in revenues. Infosys customers are happy too: 19 out 

of 20 come back to the Bangalore company with repeat orders. Now, Infosys has its eye 

on China. Of the 12,600 people it will hire this year, nearly 1,000 will be at its Shanghai 

offices.

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Company Snapshot

Infosys Technologies Limited provides consulting and information technology 

services primarily in North America, Europe, and the Asia-Pacific region. Its solutions 

include custom application development, maintenance and production support,

software re-engineering, package evaluation and implementation, and information 

technology consulting. The company also provides testing services, operations and 

business process consulting, engineering services, business process management,

systems integration, and infrastructure management services. In addition, Infosys 

Technologies provides software products to the banking industry and business 

process management services. It also provides business process management 

services, such as offsite customer relationship management, finance and accounting,

and administration, and sales order processing. The company is headquartered in 

Bangalore, India.

NO. OF EMPLOYEES

NA

DATA PROVIDED BY

Company Snapshot

Infosys Technologies Limited provides consulting and information technology 

services primarily in North America, Europe, and the Asia-Pacific region. Its solutions 

include custom application development, maintenance and production support,

software re-engineering, package evaluation and implementation, and information 

technology consulting. The company also provides testing services, operations and 

business process consulting, engineering services, business process management,

systems integration, and infrastructure management services. In addition, Infosys 

Technologies provides software products to the banking industry and business 

process management services. It also provides business process management 

services, such as offsite customer relationship management, finance and accounting,

and administration, and sales order processing. The company is headquartered in 

Bangalore, India.

NO. OF EMPLOYEES

NA

DATA PROVIDED BY