b t unstea y

growth, while realisation was steady. Of the total operating revenue, the top three companies contributed 74%. The operating profit margin (OPM) improved 240 basis points (bps) to 25.3%, aided by cost-cut­ting and cost-rationalisation measures, with utilisation improvement in some instances. Operating profit grew 8% to Rs 6519 crore. Other income was up 58% to Rs 579 crore on gain on marking to market hedges,

0906(3)
0903(3)
Var.(%)
Operating Revenues
25781
26327
-2
OPM(%)
25.3
22.9

Operating Profit
6519
6016
8
Other Income
579
366
58
PSIDT
7098
6381
11
Interest
225
204
10
PSDT
6873
6178
11
Depreciation
908
930
-2
PST
5965
5247
14
Tax
983
722
~
PAT
4982
4525
10
Minority Interest
32
35
-8
Net Profit
4949
4490
10
Cash Profit
5857
5420
8
buyback of FCCBs and higher treasury in­come. Interest cost rose 10% to Rs 227 crore. But depreciation and amortisation charge was down 2% at Rs 908 crore on cut in capex. Tax provision including current tax, deferred tax and fringe benefit tax rose 36% to Rs 983 crore with effective tax rate up 270 bps to 16.5% on lower subsidiary losses and units going out of the Software Tech­nology Park of India (STPI) benefit. Con­solidated net profit after minority interest grew 10% to Rs 4949 crore, with the top three companies contributing 82%.
lnfosys Technologies' operating revenues de-grew 3% to Rs 5472 crore in the quarter ended June 2009 over the March 2009 on 1.1 % volume dip, 3% appreciation of the rupee and I % improvement in blended real­ization. The revenue was flat in US dollars and 1.9% lower in constant currency terms. The revenue benefit ofUS$ 23 million-US$ 24 million on cross-currency tailwinds was in line with the revenue guidance ofRs 5379 crore-Rs 5480 crore and above market ex­pectation. OPM improved 50 bps to 34.1 % on improved realisation and decrease in headcount. Forex gain was Rs 31 crore as against loss of Rs 15 crore in the sequential quarter and effective taxation of 20.3% as against 16.6% in the sequential quarter. The bottom line was down 5% to Rs 1527 crore - much above market expectation.
Outlook
The lT/lTES sector saw improvement in margin in the quarter ended June 2009 due to cost- cutting measures. Whether there is further room for improvement in margins remains to be seen in the September 2009 quarter. Players also saw cross-currency tailwinds pep up revenue in the first quar­ter of the current fiscal.
On the flip side, the demand environ­ment is still cautious and unpredictable. Post result management comments on demand are not encouraging. All companies were quick to mention that the funnel is improving but they are not sure when the funnel would be converted into actual orders as decision mak­ing is slow. The most striking revelation has been the comment on new deals, which have decreased. Recovery is expected only in calendar year 20 I 0, which is still two quarters away. The markets seem to have discounted the FY 20 I 0 earning and ac­cepted the fact that it will be subdued and have started discounting the growth possi­bilities in FY 20 II. •