Infosys Technologies Ltd, India's second largest software services firm, Thursday reported 33 percent rise in net profit for the first fiscal quarter ending June 31, 2012, supported by the appreciation and depreciation of the rupee, and met analysts' expectations.

India's blue-chip IT company earned a consolidated net profit of Rs 22.89 billion for the first quarter of 2012-13 fiscal year, against a net profit of Rs 17.2 billion a year earlier.  But the company's net profit recorded a dip of 1.1 percent, compared to the Rs 23.16 billion in the previous quarter (Q4). Analysts expected a net profit of Rs 23 billion for the company.  In dollar terms, the net profit rose 8.3 percent annually to $416 million.

The company's revenues rose 28.47 percent to Rs 96.16 billion in the first quarter from Rs 74.85 billion in the same period last year, matching its revenue guidance for the quarter. The company expected its revenues for the quarter under review to be in the range of Rs 90.11 billion and Rs 91.00 billion.  

However, in dollar terms, the company failed to meet its revenue guidance, as its revenue for the quarter stood at $1752 million, against the forecast of $1771-$1789 million.

Infosys has not given any quarterly guidance, mainly because of the volatile economic condition that exists in European countries. However, the company revised its forecast of revenues  in rupee terms for the financial year 2013 to Rs 403.64 billion (19.7 per cent growth on a year-on-year basis) against previous guidance of Rs 384.31- 391.36 billion.

However, in dollar terms, the company cut its revenue forecasts for the FY2013 to $7.34 billion from the previous guidance of $7.55-7.69 billion.

 We have had sporadic price negotiations from clients in the first quarter and we will start giving quarterly guidance when situation stabilizes, said SD Shibulal, MD and CEO of Infosys.

Reacting to its first quarter results, Infosys shares dropped 8-9 percent on the Bombay Stock Exchange and 9-10 percent on the National Stock Exchange in the morning session Thursday, showing the market's disappointment.

Everything is poor in Infosys results and this kind of guidance cut will definitely materialize into further de-rating of the stock,  Harit Shah, a senior research analyst at Nirmal Bang Institutional Equities in Mumbai, was quoted as saying by the Business Standard.

The company's report card depicts that its revenues were bolstered by a sharp drop in the value of the rupee and by increase in the demand for outsourcing contracts. Outsourcing and back office servicing contracts form the backbone of India's $100-billion IT industry and a major part of its revenue comes from the U.S. and European clients.

The shares of the North American clients of Infosys went up 64.1 percent in the quarter under review, from the 62.4 percent share in the previous quarter.  However, the economic uncertainty in the European countries weighed heavily on Infosys as Europe's share declined to 21.4 percent from 23.1 percent in the same period.

Infosys said that it had not considered any wage hikes for the employees at present.   We will revisit the decision to give wage hikes, if any, in October, Shibulal said, according to moneycontrol.com.

During the quarter, Infosys and its subsidiaries added 51 clients, and net addition of employees for the quarter stood at 1157. 

The company also dismissed speculations about a Rs 20.00-billion buyback, clarifying such a move had never been considered.