<b>RESULT ANALYSIS: Infosys Technologies</b>

Revenues come in below street expectations with guidance still cautious about global demand.

Infosys Technologies reported revenues of Rs 7106 crore for the third quarter ended December 2010, about 2.2% above the upper level of guidance given last quarter. The revenues in USD terms clocked in a more satisfactory 6% quarter-on-quarter (q-o-q) growth to $1585 million. Management pointed towards an impact from the rupee volatility given the average USD-INR rate in Q3FY11 was Rs 44.83, 3.5% appreciation q-o-q but still lower than company expectation of Rs 44.50 indicated last quarter. The quarter saw volume growth of 3.1% with pricing growth of 1.6% and margins were stable at about 30.2% as the company reported net profit growth of about 2.5% q-o-q and 14% y-o-y to Rs 1780 crore.

The company guided for a muted 1-1.7% sequential revenue growth for the next quarter. A key dampener was the relatively cautious commentary on business outlook, as CEO and MD, S Gopalakrishnan, continued to emphasize the risks from weaker economic recovery and sovereign default on demand. However, management clarified that environment suggests a normal year ahead for the company and industry with growth in the higher teens.

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