Mohandas Pai resigns; company appoints Ravi Venkatesan as additional director with immediate effect; board to meet on 30th April to finalise leadership succession on Narayana Murthy's retirement in August
Mumbai: Infosys Technologies Ltd, the country's second biggest software services exporter today announced a 13.6% growth in net profit to Rs 1,818 crore for the quarter to March 2011, but lagged market expectations, hurt by higher costs in the seasonally weak fourth quarter. That compares with a net profit of Rs1,600 crore in the previous corresponding quarter.
Profit after tax and exceptional items was Rs1,730 crore in the period under review, compared to Rs1,430 crore for the period last year. The company's total income increased to Rs7,055 crore in the quarter from Rs5,690 crore in the period a year ago.
The Infosys stock price dipped in early trade to Rs3,057 at 11am, down 7.5% from its close on Wednesday. The sentiment also affected other major IT stocks like Tata Consultancy Services and Wipro which were also down over 2% and 4%, respectively.
The board of directors of the company has recommended a final dividend of Rs20 a share for the financial year ended March 2011.
For the year ended 31 March 2011, the group posted a net profit of Rs6,823 crore on a consolidated basis, compared to Rs6,219 crore for the previous year ended 31 March 2010. Total income increased to Rs28,712 crore from Rs23,732 crore.
For the year ended March 31, 2011, the company posted a net profit after tax and exceptional items of Rs6,443 crore compared to Rs5,803 crore in the previous year ended March 31, 2010. The company's total income for the year increased to Rs26,532 crore from Rs22,050 crore.
The company said that TV Mohandas Pai has decided resign as a member of the board of directors and has asked to be relieved after the annual general meeting on 11 June 2011. Also K Dinesh, member of the board and co-founder of the company retires on 11 June 2011 and has expressed his intention not to be re-appointed. The company said that Ravi Venkatesan, the former Microsoft India chairman, has been appointed as an additional director of the company with immediate effect.
The company also informed the Bombay Stock Exchange that a meeting of the board will be held on 30 April 2011, to finalise plans for the company's leadership succession, post NR Narayana Murthy's retirement as chairman of the board in August 2011.
The domestic earnings season officially kicks off with Infosys announcing its Q4 numbers today
The Indian market is likely to open soft on the back of tepid cues from the global arena. US stocks, which opened in the red on weak economic data, ended with marginal gains while markets in Asia witnessed small gains in early trade as investors on Chinese inflation data and on fears that the last month’s earthquake and tsunami that devastated Japan would impact quarterly earnings. The SGX Nifty was down 41 points at 5,903 from its previous close of 5,944.
On the domestic front, IT bellwether Infosys Technologies is set to declare its quarterly numbers and announce its guidance for the fiscal 2011-12 today. Analysts are betting on a 3%-4% q-o-q revenue growth for the company. Besides, the government will release the wholesale price index (WPI) based inflation figures for March. Headline inflation for February stood at 8.31%, above the government’s comfort levels. The numbers will hold the key for the Reserve Bank of India to tinker with interest rates, going ahead.
On Wednesday the local market closed higher, erasing the losses accrued in the previous trading sessions. The Sensex surged 434 points to close at 19,697 and the Nifty gained 126 points to settle at 5,911,
The US markets, which opened lower on negative economic cues, closed with marginal gains overnight. Initial claims for unemployment benefits rose 27,000 to a seasonally adjusted 412,000, more than analysts’ estimates for a 380,000 fall. The previous week’s figure was revised up to 385,000 from the previously reported 382,000. The Labor Department said on Thursday its seasonally adjusted index for crore producer prices paid at the farm and factory gate—excluding volatile food and energy costs—rose 0.3% in March after gaining 0.2% in February. Economists had expected core PPI to rise 0.2% in March.
In the corporate arena, Google gained 0.4% ahead of its first quarter results. However, the stock slipped over 4% as its earnings fell short of expectations. Supervalu Inc soared 17% after it projected full-year profit that beat projections. Halliburton Co and Anadarko Petroleum Corp added more than 1.3% as oil rose on reports that Saudi Arabia reduced output this month. JP Morgan Chase & Co and Wells Fargo & Co fell at least 1.7% as Goldman Sachs Group cut its recommendation on financial shares.
The Dow gained 14.16 points (0.12%) to end at 12,285.15. The S&P 500 added 0.11 of a point (0.01%) to 1,314.52 while the Nasdaq shed 1.30 points (0.05%) to 2,760.22.
Markets in Asia witnessed small gains in early trade on Friday on China’s inflation numbers for March. The data, which was released a while ago, came in at 5.4% in March, a 32-month high and up from 4.9% in February.
The country’s annual gross domestic product growth witnessed a marginal decline in the first quarter of 2011 to 9.7% from 9.8% in the previous quarter. Besides, weak economic data emanating from the US and renewed debt concerns in Europe weighed on investors.
The Shanghai Composite was 0.07% higher, the Hang Seng surged 0.77, the Jakarta Composite gained 0.39%, the KLSE Composite rose 0.01%, the Straits Times added 0.09% and the Taiwan Weighted was0.06% higher. On the other hand, the Nikkei 225 slid 0.43% and the Seoul Composite shed 0.12%.
Back home, the Supreme Court, on Friday, will hear a plea by Vodafone challenging the Income Tax (I-T) department initiating penalty proceedings in the $2 billion tax case relating to the company's stake purchase in Hutchison-Essar.
Vodafone’s application would be mentioned before a three-judge Bench headed by the Chief Justice SH Kapadia. Earlier, the I-T department had issued notice to Vodafone in March saying penal action would be initiated against the British telecom major in the tax case.