Infosys Technologies Ltd, India's second largest software services firm, reported Friday a 24 percent rise in the net profit for the second fiscal quarter ending June 31, 2012,  in line with market expectations. However, the Bangalore-based company gave a weaker-than-expected earnings forecast for the third quarter, sending its shares down by 5 percent in the morning trade.

India's blue-chip IT company earned a consolidated net profit of Rs. 23.69 billion for the second quarter of 2012-2013 fiscal year, up from net profit of Rs. 19.06 billion a year earlier, compared to Reuters' estimate of Rs. 23.8 billion. Revenue rose by 21 percent from a year ago to Rs 98.58 billion against the average analysts’ expectation of 99.10 billion. 

The company missed the analysts’ expectation in dollar terms; the net profit rose 8.3 percent annually to $416 million on revenue of $1.797 billion versus the market expectations of revenue of $1.81 billion.

The company maintained its outlook for revenue in dollar terms for the fiscal year at 5 percent to 7.343 billion but cut its revenue growth forecast after adjustments for currency fluctuations by 0.3 percentage point from its previous projection.

Infosys lowered its full year earnings forecast per American Depository share to $2.97 from its prior estimate of $3.03, following the rupee appreciation, and cut its rupee based full-year guidance to Rs. 160.61 per share from 166.46 per share.

India’s IT bellwether has been struggling to meet market expectations and retain its growth momentum in the past few quarters. Infosys had not given any quarterly guidance, mainly because of the volatile economic condition that exists in European countries and sharply revised its forecast of revenues in rupee terms for the financial year 2013 to Rs. 403.64 billion (19.7 percent growth on a year-on-year basis) against a previous guidance of Rs. 384.31-391.36 billion in the first quarter.

The market was expecting Infosys to increase its revenue forecast following its acquisition of the Swiss consultancy Lodestone last month. The company’s revenue in terms of rupee was bolstered by sharp depreciation in the value of the rupee and increased demand for outsourcing contracts from the U.S. and European countries in the previous quarter. 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.

However, the recent appreciation in the rupee and the continued weakness in the global economy have forced the IT major to keep its guidance for the year to low.

"Global economic uncertainties continue to face the industry," chief executive S.D. Shibulal said in a statement.

Infosys shares dropped 4-5 percent on the Bombay Stock Exchange and the National Stock Exchange in the morning session Friday in reaction to its second quarter results, showing the market's disappointment.

Infosys said that it had hiked the wages for the employees in this quarter and enhanced investment in the research and development, according to

During the quarter, Infosys added 39 clients and hired 2,610 of employees for that quarter.    

Infosys CFO Resigns

In a surprise move, Infosys announced that its Chief Finance Officer V. Balakrishnan will step down from his position by Nov. 1 and Rajiv Bansal, currently the vice president of finance, will replace him. Balakrishnan will continue as the member of the Infosys board, the company said in a statement.