P1246990959MITUF - PowerPoint PPT Presentation

Title: P1246990959MITUF


1
Performance of Infosys for the Second Quarter and
Half Year ended September 30, 2001
Nandan M. Nilekani Managing Director, President
and Chief Operating Officer
10-October-2001
2
Safe Harbour

• 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 fluctuations in earnings,
  our ability to manage growth, intense competition
  in IT 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, our
  ability to manage our international operations,
  reduced demand for technology in our key focus
  areas, disruptions in telecommunication networks,
  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, 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, 2001 and quarterly
  report on Form 6-K for the quarter ended
  June 30, 2001. This filing is available at
  www.sec.gov. Infosys may, from time to time, make
  additional written and oral forward-looking
  statements, including statements contained in the
  companys filings with the Securities and
  Exchange Commission and our reports to
  shareholders. The company does not undertake to
  update any forward-looking statement that may be
  made from time to time by or on behalf of the
  company.

3
Agenda

• Financial Performance
• Operational Performance
• Client acquisition and significant projects
  undertaken
• Human resources
• Infrastructure
• Outlook for the future

4
Financial Performance
5
The Quarter at a Glance (Indian GAAP)
650.13
46
638.27
258.92
47
45
446.10
176.42
441.26
Q2 01
Q2 01
Q2 02
Q2 02
Q2 01
Q2 02
Total income (Rs.cr)
Exports (Rs.cr)
Operating profit (Rs.cr)
6
The Quarter at a Glance (Indian GAAP)
201.56
31
31
37
234.56
30.47
154.01
23.28
171.76
Q2 01
Q2 01
Q2 02
Q2 01
Q2 02
Q2 02
PBT (Rs.cr)
PAT (Rs.cr)
Basic EPS (Rs)
From ordinary activities
7
Highlights (Indian GAAP)
(Rs.cr) FY2002 FY2002 FY2001 growth
over Q2 Q1 Q2 Q1 02 Q2 01 Income 650.13 612.52 44
6.10 6.1 45.7 S/w development expenses 306.95 285.
56 204.57 7.5 50.0 Gross profit 343.18 326.96 241.
52 5.0 42.1 S,GA expenses 84.26 86.44 65.10 (2.5)
29.4 Operating profit 258.92 240.51 176.42 7.7 46
.8 Depreciation 39.01 35.48 24.24 10.0 61.0 Operat
ing profit after depreciation 219.91 205.03 152.1
8 7.3 44.5 Other income 14.66 13.50 19.58 8.6 (25
.1) PBT 234.56 218.53 171.76 7.3 36.6 Provision
for tax 33.00 28.50 17.75 15.8 85.9 PAT from
ordinary activities 201.56 190.03 154.01 6.1 30.9
8
Half Year at a Glance (Indian GAAP)
1262.65
58
1234.58
499.43
59
56
801.63
314.06
792.32
H1 01
H1 01
H1 02
H1 02
H1 01
H1 02
Total income (Rs.cr)
Exports (Rs.cr)
Operating profit (Rs.cr)
9
Half Year at a Glance (Indian GAAP)
391.59
42
39
48
453.09
59.19
275.31
42.45
306.77
H1 01
H1 01
H1 02
H1 01
H1 02
H1 02
PBT (Rs.cr)
PAT (Rs.cr)
Basic EPS (Rs)
From ordinary activities
10
Highlights (Indian GAAP)
(Rs.cr) FY2002 FY2001
Growth H1 H1 Income 1262.65 100.0 801.62 100.0
57.5 S/w development expenses 592.51 46.9 375.42
46.8 57.8 Gross profit 670.13 53.1 426.20 53.2 57.
2 S,GA expenses 170.71 13.5 112.15 14.0 52.2 Oper
ating profit 499.43 39.6 314.06 39.2 59.0 Deprecia
tion 74.49 5.9 41.97 5.2 77.5 Operating profit
after depreciation 424.94 33.7 272.08 33.9 56.2 O
ther income 28.15 2.23 34.69 4.3 (18.9) PBT 453.0
9 35.9 306.77 38.3 47.7 Provision for
tax 61.50 4.9 31.46 3.9 95.5 PAT from ordinary
activities 391.59 31.0 275.31 34.3 42.2 Extraordin
ary items - - 5.49 0.7 - Net profit after ext.
items 391.59 31.0 280.81 35.0 39.5
11
Highlights

• Q1 FY 02 Q2 FY 02 H1 FY 02
• Indian GAAP
• Y-O-Y Growth
• Income 72.3 45.7 57.5
• PAT from ord. activities 56.7 30.9 42.2
• US GAAP
• Y-O-Y Growth
• Revenues 62.6 40.1 50.3
• Net income 46.3 26.0 35.1
• New clients 26 28 54
• Repeat business 95.2 90.0 92.5
• Headcount
• Gross addition 315 833 1,148
• Net addition 116 607 723
• Period end headcount 9,947 10,554 10,554

12
Balance Sheet Summary

• (Rs.cr)
• Sep 30, 01 Sep 30, 00
• LIABILITIES
• Shareholders funds 1,742.49 100 1,094.04 100
• Total liabilities 1,742.49 100 1,094.04 100
• ASSETS
• Fixed assets 713.66 41 365.19 33
• Investments 44.44 3 45.73 4
• Deferred tax assets 18.64 1 - -
• Current assets
• Cash equivalents 714.85 41 535.90 49
• Accounts receivables 343.60 20 243.06 22
• Other current assets 336.10 19 176.94 16
• Less Current liabilities (428.80) (25) (272.78) (
  25)
• Net current assets 965.75 55 683.12 62
• Total assets 1,742.49 100 1,094.04 100

13
Region wise Revenue ()

• FY2002 FY2002 FY2001 FY2002 FY2001 LTM LTM
• Q2 Q1 Q2 H1 H1 Sep01 Sep 00
• North America 71.1 72.2 75.0 71.6 74.7 72.1
  76.1
• Europe 18.9 19.8 18.1 19.4 17.7 19.5 16.3
• India 1.8 2.6 1.1 2.2 1.2 1.9 1.3
• Rest of
• the world 8.1 5.3 5.8 6.8 6.4 6.5 6.3
• Total 100.0 100.0 100.0 100.0 100.0 100.0
  100.0
• LTM Last Twelve Months

14
Operational Performance
15
Utilization Rates
16
Revenues by Project type

• FY2002 FY2002 FY2001 FY2002 FY 2001 LTM LTM
• Q2 Q1 Q2 H1 H1 Sep 01 Sep 00
• Fixed Price 29.9 27.0 27.6 28.5 27.1 28.7 2
  9.3
• Time Materials 70.1 73.0 72.4
  71.5 72.9 71.3 70.7
• Total 100.0 100.0 100.0 100.0 100.0 100.0
  100.0

17
Onsite-Offshore Revenue split

• FY2002 FY2002 FY2001 FY2002 FY2001 LTM LTM
• Q2 Q1 Q2 H1 H1 Sep 01 Sep 00
• Onsite 50.3 50.5 54.6 50.4 53.7 50.1 52.2
• Offshore 49.7 49.5 45.4 49.6 46.3 49.9 47.
  8
• Total 100.0 100.0 100.0 100.0 100.0 100.0 1
  00.0

18
Customer Concentration

• FY2002 FY2002 FY2001 FY2002 FY2001
• Q2 Q1 Q2 H1 H1
• Top client contribution
• to revenues 6.4 6.7 7.7 6.6 7.4
• Top 5 client contribution
• to revenues 25.3 27.4 24.9 26.1 24.4
• Top 10 client contribution
• to revenues 39.7 43.7 38.0 41.2 36.9
• Million dollar clients 84 84 57 84 57
• Five million dollar clients 22 21 12 22 12
• Ten million dollar clients 14 11 6 14 6
• LTM

19
Diversifying Customer Risk
20
Accounts Receivables
Year AR of DSO (mn) Operating Revenue H1 FY
02 71.81 13.6 50 H1 FY 01 52.82 15.2 55 FY
2001 64.94 15.9 58
21
Other Highlights

• Software revenues in US dollar terms grew by 5.2
  during the quarter over the quarter ended June
  30, 2001. Revenue growth comprised volume growth
  of 2.6 and price growth of 2.6, as compared to
  the quarter ended June 30, 2001
• Interim dividend of Rs. 7.50 per share (150 on
  an equity share of par value of Rs. 5 per share)
  declared by the Board

22
Client Acquisition and Significant Projects
Undertaken
23
Client Acquisition

• Client acquisitions during the quarter was 28 as
  compared to 26 in Q1 of FY 2002
• Strengthened presence in the financial services
  industry through strategic services like
• Post merger integration for UFJ Holdings, The
  Sanwa Bank, The Tokai Bank and the Toyo Trust and
  Banking Company
• Straight through processing a mission critical
  application development project for a leading
  financial institution
• Security consulting for Bank Muscat, one of the
  largest banks in Oman
• Other prestigious clients added in the financial
  services industry include
• DGZ DekaBank, the largest investment bank in
  Germany
• ING Group
• Royal Bank of Canada Financial Group, the largest
  and oldest financial institution in Canada
• Won its first consulting engagement in the
  government sector with an assignment for UK
  Governments National Health Service

24
Projects Undertaken

• Currently working with Lear Corporation and
  Visteon, two of the largest automotive suppliers
  in the world
• Started work for the Japan-based JGC Corporation,
  a fully integrated engineering procurement
  construction company
• Won engagements from a leading apparel company
  and a large office supplies superstore in the US
• Other prestigious clients in the retail sector
  include
• Trader Joes, a US-based speciality grocer
• McCain Foods, a diversified foods major based in
  Canada
• Pier 1 Imports, one of the leading retailer of
  gifts and home furnishings located in the US
• Vivendi Water Systems, the worlds largest water
  company and Dentsu MarchFirst, the IT subsidiary
  of Dentsu Inc., a leading advertisement major in
  Japan are other significant clients added during
  the quarter

25
Banking Products

• Successfully deployed FinacleTM, Infosys core
  banking solution, for Kenya Commercial Bank, the
  largest bank in East Africa with over 100
  branches in Kenya and a presence in Tanzania
• Successfully completed the implementation of
  BankAway corporate banking and WAP banking at
  National Bank of Abu Dhabi, the leading bank in
  the Middle East
• Successfully implemented BankAway (retail
  banking) for IDBI Banking

26
Human Resources
27
Human Resources

• Total employees strength at 10,554 as on
  September 30, 2001, up from 9,831 as on March 31,
  2001 and 7,925 as on September 30, 2000
• Net addition of 607 employees during the quarter
  as compared to 116 during the quarter ended June
  30, 2001
• 92 lateral employees joined during the quarter
• 9,297 software professionals as on September 30,
  2001, up from 8,656 as on March 31, 2001 and
  6,941 as on September 30, 2000
• Of these software professionals, 690 are
  undergoing training and 146 belong to the Banking
  Products group
• Deferred the joining schedules of campus
  recruits to align them with our business
  requirements

28
Infrastructure
29
Infrastructure

• Capital expenditure of Rs. 129.77 cr was incurred
  during the quarter
• As of September 30, 2001, the company had
  19,98,800 sq. ft of space capable of
  accommodating 11,100 professionals and 15,61,000
  sq. ft under construction including the Infosys
  Leadership Institute

30
Outlook for the Future
31
Indian GAAP

• Quarter ending December 31, 2001
• Income from software development services and
  products is expected to be in the range of Rs.
  640 cr to Rs. 656 cr
• Earnings per share is expected to be in the range
  of Rs. 29.00 to Rs. 31.00
• Fiscal year ending March 31, 2002
• Income from software development services and
  products is expected to be in the range of Rs.
  2,540 cr to Rs. 2,590 cr
• Earnings per share is expected to be in the range
  of Rs. 120.00 to Rs. 123.00

32
Summary
33
Summary

• Reported a comfortable quarter amidst turbulent
  conditions
• Pricing pressure continues
• Challenging business environment
• Phased-out joining schedules of campus recruits
  to align with business requirements
• Effective cost management
• Increase breadth and depth of services
• Prepared to seize business opportunities

34
Thank You