Infosys not buoyed by results
CNN Hong Kong
MUMBAI, India (CNN) -- Initial optimism after Infosys Technologies announced a 14 percent jump in first quarter profit has given way to stock-market selling.
The Bangalore-based software firm reported a 14.11 percent jump in net profits for the June quarter, to 2.16 billion rupees ($44.2 million).
The results led to a 2.5 percent stock pop immediately after they came out on Wednesday. But the stock later sagged, closing down 1.8 percent, and Infosys is off again on Thursday.
It is down 0.85 percent in afternoon trade in Mumbai. The results have not been enough to shake the broad tech selloff in Asia.
Profits gain muted over prior quarter
In Wednesday trade on Wall Street, Infosys finished ahead of Nasdaq. Its results for the first quarter were better than analysts anticipated.
Compared with the previous quarter, though, profits were up just 3.1 percent.
Infosys posted sales of 7.65 billion rupees ($156.7 million), an increase of 19.86 percent year-on-year. That's 12.42 percent sequential growth.
"Revenue growth during the quarter has been robust," said CEO and managing director Nandan Nilekani.
Indian tech stocks suffered from the lingering effects of a tech slump worldwide. The Nikkei closed 2.48 percent lower in Asia trade (Asian roundup).
Infosys closed only marginally down on Nasdaq on Wednesday, off 0.2 percent. That was a comparatively strong showing, with the market closing down 2.54 percent to its lowest level in five years. (full story)
The company was guarded about expectations for next quarter, expecting revenue to be between 7.62 billion and 7.81 billion rupees ($156.1 million and $160 million).
"We continue to remain cautious due to delays in client and prospect visits arising from adverse travel advisories and due to a challenging global business environment," Nilekani noted.
Precautions for war
The Times of India reported that Infosys is taking precautions should tensions between India and Pakistan escalate into war. Tensions remain high over the contested region of Kashmir (full story).
The company plans to set up a disaster recovery center in Canada or Singapore and is currently negotiating a blanket visa for 500 to 700 employees in order to keep operating despite disruptions.
"We are looking at confidence-building measures under which we could address the concerns of our customers, who want to be sure that we can move to a safe location outside the country," Chief Operating Officer S. Gopalkrishnan said.
Analysts said the decision may have been swayed by the advisories issued by the United States and the United Kingdom against traveling to India. No clients visited the company's headquarters in June.
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