October 11, 2005 01:16 ET

Infosys Technologies, NASDAQ:INFY, Announces Results for the Quarter Ended September 30, 2005; Half-Year FY06 Revenue Reaches US$ 1 Billion

BANGALORE, India--(CCNMatthews - Oct 11, 2005) -

Infosys Technologies Limited (Nasdaq:INFY):

Guidance revised upwards. Revenues expected to grow 34% in fiscal 2006


Consolidated results for the quarter ended September 30, 2005

-- Second quarter revenues at $ 524 million, up 38.3% from the corresponding quarter last fiscal

-- Earnings per American Depositary Share (ADS) increased to $ 0.51 from $ 0.36 in the corresponding quarter last fiscal

-- 34 new clients were added during the quarter

-- Gross addition of 8,026 employees for the quarter (Net addition of 6,390 employees)

-- 46,196 employees as on September 30, 2005

Outlook for the quarter ending December 31, 2005 and the fiscal year ending March 31, 2006

-- Consolidated revenues expected to be between $ 556 million and $ 558 million for the quarter ending December 31, 2005 (YoY growth of 31.4% - 31.9%) and $ 2.14 billion for the fiscal year ending March 31, 2006; (YoY growth of 34.4%)

-- Consolidated earnings per ADS expected to be $ 0.53 for the quarter ending December 31, 2005, (YoY growth of 26.2%) and between $ 2.04 and $ 2.05 for the fiscal year ending March 31, 2006; (growth of 29.9% - 30.6%)

Infosys Technologies Limited ("Infosys" or "the company") today announced financial results for its second quarter ended September 30, 2005. Revenues for the quarter aggregated $ 524 million, up 38.3% from $ 379 million for the quarter ended September 30, 2004.

"We have seen robust growth during the quarter due to our effective focus on offering a broad array of services to our clients," said Nandan M. Nilekani, CEO, President and Managing Director. "It took us the whole of fiscal 2004 to reach a revenue of US$ 1 billion. We reached the same level in the first six months of this year."

"During this quarter we recruited 8,026 employees (gross), which is the highest ever during any quarter," said S. Gopalakrishnan, Member of the Board and COO. "Our investments in creating a world-scale global education center coupled with our spend on education and research has enabled us to scale up rapidly."

Infosys won its single largest multi-year, multi-million dollar contract from ABN AMRO to develop, support and enhance a wide spectrum of applications. This reinforces our belief that the offshoring of large deals is a mega trend. In a continuing partnership with a Swiss market leader in IT outsourcing and business service provisioning services, Infosys is providing a core banking services platform to the private banking sector in Europe. Further, Infosys entered into a high-volume, multi-year strategic engagement with a large hi-tech company to unify its IT systems across multiple branches and subsidiaries.

Infosys is helping clients realize value from investments in Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and other enterprise applications for business transformation.

Leading companies in the banking, capital markets and financial services sectors are seeking Infosys' domain expertise and industry-specific solutions to address their business problems. A leading diversified financial services company engaged Infosys to define a strategy for streamlining systems and processes to improve operational efficiency. Infosys' Operational Risk Management Solution is enabling an investment management and outsourcing company to create an enterprise-wide framework to define, identify, measure, mitigate and report risk across key client business lines.

Infosys' Independent Validation Services are enhancing the competitiveness of key clients across industries, including an international leader in investment banking and financial services and a leading Europe-based retailer.

"The ABN AMRO deal, signed this quarter, signifies the entry of Infosys into the arena of large, global, multi-year outsourcing contracts and is an endorsement of our competitive business model," said S. D. Shibulal, Member of the Board and Head - Sales and Delivery. "Our strong customer service engine is enabling us to address client needs effectively."

"The pricing environment is stable with an upward bias. We have maintained margins despite record hiring of employees during the quarter," said T. V. Mohandas Pai, Member of the Board and CFO. "Liquid assets have gone up by $ 114 million. The rupee has depreciated during the quarter creating a more benign margin environment."

About the company

Infosys is a leading global technology services firm founded in 1981. Infosys provides end-to-end business solutions that leverage technology for our clients across the entire software life cycle: consulting, design, development, re-engineering, maintenance, system integration, package evaluation and implementation. In addition, Infosys offers software products to the banking industry, as well as business process management services through its majority-owned subsidiary, Progeon. For more information, contact V. Balakrishnan at +91 (80) 2852 0440 in India or visit us on the World Wide Web at

Safe Harbor

Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT, business process outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2005 and quarter ended June 30, 2005 .These filings are available at We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.

Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Balance Sheets

(Dollars in millions)

As of
March 31, September 30,
2005 (1) 2005
Current Assets
Cash and cash equivalents $410 $334
Investment in liquid mutual fund units 278 531
Trade accounts receivable, net of allowances 303 304
Deferred tax assets 2 2
Prepaid expenses and other current assets 35 38
Unbilled revenue 32 41
Total current assets 1,060 1,250
Property, plant and equipment, net 352 435
Goodwill 8 8
Deferred tax assets 8 9
Other assets 26 32
Total Assets $1,454 $1,734

Current Liabilities
Accounts payable $1 $1
Client deposits 7 2
Other accrued liabilities 124 128
Income taxes payable 23 18
Unearned revenue 20 40
Total current liabilities 175 189
Non-current liabilities
Preferred stock of subsidiary 21 -
Other non-current liabilities 5 5
Minority Interests - 12
Stockholders' Equity
Common stock, $ 0.16 par value 300,000,000
equity shares authorized, Issued and
outstanding - 270,570,549 and 272,659,512
equity shares as of March 31, 2005 and
September 30, 2005, respectively 31 31
Additional paid-in capital 266 335
Accumulated other comprehensive income 33 25
Retained earnings 923 1,137
Total stockholders' equity 1,253 1,528
Total Liabilities and Stockholders' Equity $1,454 $1,734

(1) March 31, 2005 balances were obtained from audited financial

Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Statements of Income

(Dollars in millions except per share data)
Three months ended Six months ended
September 30, September 30,
2004 2005 2004 2005
Revenues $379 $524 $713 $1,000
Cost of revenues 214 297 401 571
Gross profit 165 227 312 429
Selling and
expenses 26 35 50 67
General and
expenses 30 46 56 83
Amortization of
intangible assets - - 1 -
Total operating
expenses 56 81 107 150
Operating income 109 146 205 279
Other income, net 6 9 6 16
Income before
income taxes and
minority interest 115 155 211 295
Provision for
income taxes 18 16 31 34
Income before
minority interest 97 139 180 261
Minority Interest - 1 - 1
Net income $97 $138 $180 $260
Earnings per
equity share
Basic $0.36 $0.51 $0.68 $0.96
Diluted $0.35 $0.49 $0.66 $0.93
Weighted average
equity shares
used in computing
earnings per
equity share
Basic 266,262,865 270,687,619 265,781,580 270,134,731
Diluted 272,121,905 278,304,058 271,186,823 277,695,111

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