Performance of Infosys for the Third Quarter Ended December 31,

8/14/2019 Performance of Infosys for the Third Quarter Ended December 31,

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Performance of Infosys for the Third Quarterended December 31, 2001

10-January-2002

Nandan M. NilekaniManaging Director, President

and Chief Operating Officer


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Safe Harbour

Certain statements in this release concerning our future growth prospects areforward-looking statements which involve a number of risks and uncertainties that

could cause actual results to differ materially from those in such forward-lookingstatements. The risks and uncertainties relating to these statements include, butare not limited to, risks and uncertainties regarding fluctuations in earnings, ourability to manage growth, intense competition in IT services including those factorswhich may affect our cost advantage, wage increases in India, our ability to attractand retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability tomanage our international operations, reduced demand for technology in our key

focus areas, disruptions in telecommunication networks, our ability to successfullycomplete and integrate potential acquisitions, liability for damages on our servicecontracts, the success of the companies in which Infosys has made strategicinvestments, withdrawal of governmental fiscal incentives, political instability, legalrestrictions on raising capital or acquiring companies outside India, andunauthorized use of our intellectual property and general economic conditionsaffecting our industry. Additional risks that could affect our future operating resultsare more fully described in our United States Securities and Exchange Commissionfilings 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 quarters ended June 30 andSeptember 30, 2001. These filings are available at www.sec.gov. Infosys may, fromtime to time, make additional written and oral forward-looking statements, includingstatements contained in the companys filings with the Securities and ExchangeCommission and our reports to shareholders. The company does not undertake toupdate any forward-looking statement that may be made from time to time by or onbehalf of the company.
http://www.sec.gov/http://www.sec.gov/http://www.sec.gov/


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Agenda

Financial Performance

Operational Performance

Client acquisition and significant projects undertaken

Human resources

Infrastructure

Outlook for the future


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Financial Performance


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The Quarter at a Glance (Indian GAAP)

23%

Total income(Rs.cr)

Exports(Rs.cr)

23%

23%

Operating profit(Rs.cr)

537.07

Q3 01 Q3 02

660.81

529.24

648.35

Q3 01 Q3 02

217.46

267.45

Q3 02Q3 01


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The Quarter at a Glance (Indian GAAP)

PBT(Rs.cr)

30% 2

4%

PAT(Rs.cr)

24%

Basic EPS(Rs)

185.83

Q3 01 Q3 02

241.04166.33

206.04

Q3 01 Q3 02

31.14

Q3 02Q3 01

25.14


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Highlights

Q3 FY 02 Q2 FY 02 9 Months FY 02

Indian GAAP

Y-O-Y Growth Income 23.0% 45.7% 43.7% PAT from ord. activities 23.9% 30.9% 35.3%

New clients 33 28 87

Repeat business 85.7% 90.0% 90.2%

Headcount

Gross addition 219 833 1367

Net addition 109 607 832

Period end headcount 10,663 10,554 10,663


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Highlights (Indian GAAP)

(Rs.cr)

FY2002 FY2002 FY2001 % growth over

Q3 Q2 Q3 Q2 02 Q3 01

Income 660.81 650.13 537.07 1.6 23.0

S/w development expenses 309.50 306.95 250.14 0.8 23.7

Gross profit 351.31 343.18 286.93 2.4 22.4

S,G&A expenses 83.86 84.26 69.47 (0.5) 20.7

Operating profit 267.45 258.92 217.46 3.3 23.0

Depreciation 41.34 39.02 33.02 5.9 25.2

Operating profit afterdepreciation 226.11 219.90 184.44 2.8 22.6

Other income 14.93 14.66 14.47 1.8 3.2

Provision for investments - - (13.08) - -

PBT 241.04 234.56 185.83 2.8 29.7

Provision for tax 35.00 33.00 19.50 6.1 79.5

PAT from ordinary activities 206.04 201.56 166.33 2.2 23.9


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Highlights (Indian GAAP)

(Rs.cr)

FY2002 % FY2001 % Growth

9 Months 9 MonthsIncome 1923.46 100.0 1338.70 100.0 43.7

S/w development expenses 902.01 46.9 625.57 46.7 44.2

Gross profit 1021.45 53.1 713.13 53.3 43.2

S,G&A expenses 254.57 13.2 181.61 13.6 40.2

Operating profit 766.88 39.6 531.52 39.7 44.3Depreciation 115.83 6.0 74.99 5.6 54.5

Operating profit afterdepreciation 651.05 33.8 456.53 34.1 42.6

Other income 43.08 2.2 49.16 3.7 (12.4)

Provision for investments - - (13.08) (1.0) -

PBT 694.13 36.1 492.61 36.8 40.9

Provision for tax 96.50 5.0 50.96 3.8 89.4

PAT from ordinary activities 597.63 31.1 441.65 33.0 35.3

Extraordinary items - - 5.49 0.4 -

Net profit after ext. items 597.63 31.1 447.14 33.4 33.7


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(Rs.cr)

Dec 31, 01 % Dec 31, 00 %

LIABILITIES

Shareholders funds 1,949.93 100 1,261.09 100

Total liabilities 1,949.93 100 1,261.09 100

ASSETS

Fixed assets 725.29 37 457.23 36Investments 44.44 2 36.33 3

Deferred tax assets 22.33 1 - -

Current assets

Cash & equivalents 866.35 45 517.75 41

Accounts receivables 310.53 16 303.96 24Other current assets 377.79 19 202.72 16

Less: Current liabilities (396.80) (20) (256.90) (20)

Net current assets 1,157.87 60 767.53 61

Total assets 1,949.93 100 1,261.09 100

Balance Sheet Summary


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FY2002 FY2002 FY2001 FY2002 FY2001 LTM LTM

Q3 Q2 Q3 9 Months 9 Months Dec 01 Dec 00

North America 70.9% 71.1% 73.6% 71.4% 74.3% 71.4% 74.9%

Europe 19.4% 18.9% 18.8% 19.4% 18.1% 19.6% 17.7%

India 1.9% 1.8% 1.5% 2.1% 1.3% 2.0% 1.4%

Rest ofthe world 7.8% 8.2% 6.1% 7.1% 6.3% 7.0% 6.0%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

LTM Last Twelve Months

Region wise Revenue (%)


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Operational Performance


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Highlights

Software revenues in US dollar terms grew by 0.2% for the

current quarter as compared to the quarter endedSeptember 30, 2001. Revenue growth comprised volume

growth of 3.4% offset by a price decline of 3.2%


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Utilization Rates

68.8

72.7

69.6

72.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Q2 FY 2002 Q3 FY 2002

Q2 FY 2002 68.8 72.7

Q3 FY 2002 69.6 72.7

Including trainees Excluding trainees


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Onsite-Offshore Revenue split

FY2002 FY2002 FY2001 FY2002 FY2001 LTM LTM

Q3 Q2 Q3 9 Months 9 Months Dec 01 Dec 00

Onsite 49.9% 50.3% 51.4% 50.3% 52.8% 49.8% 52.2%

Offshore 50.1% 49.7% 48.6% 49.7% 47.2% 50.2% 47.8%

Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%



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Customer Concentration

FY2002 FY2002 FY2001 FY2002

FY2001Q3 Q2 Q3 9 Months

9 Months

Top client contributionto revenues 5.5% 6.4% 7.7% 6.2%

7.5%

Top 5 client contributionto revenues 24.1% 25.3% 28.1% 24.6%

25.9%

Top 10 client contributionto revenues 38.3% 39.7% 42.5% 39.7%

38.5%

Million dollar clients* 90 84 77 9077

Five million dollar clients* 24 22 15 2415

Ten million dollar clients* 13 14 6 13



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Diversifying Customer Risk

299

3328

293

0

30

60

90

120

150

180

210

240

270

Q2 FY 2002 Q3 FY 2002

New Customers Active Clients


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Year AR % of DSO(mn$) Revenue

Dec 31, 2001 64.51 12.1 44

Dec 31, 2000 65.10 17.0 62

Mar 31, 2001 64.94 15.9 58

Accounts Receivables


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Client Acquisition andSignificant Projects Undertaken


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Client acquisitions during the quarter was 33 as compared to 28 in

the previous quarter

Established new alliances with world leaders in various domains

including manufacturing, retail and financial services

To help SunAmerica transform its legacy Policy Administration

System to a new web-based architecture

Creating a roadmap and an implementation plan for an Enterprise

Portal for a banking, insurance and asset management leader in

Europe that is one of the largest global financial conglomerates

Clients added in the retail segment include Target Corporation,

Americas fourth largest general merchandise retailer

Software Services


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Won an engagement from the largest independent supplier of heating,

ventilating, air conditioning and refrigeration equipment in the US

Assisting the European operations of a leading Fortune 500

electronics and hi-technology products manufacturer in developing an

end-to-end solution for its executive level reporting

The Hertsmere Borough Council of National Health Service, UK was

added to the client portfolio with a business consulting engagement

Infosys is the only Indian company to be included in the UK

Governments single-window Services Catalogue (S-Cat) aimed at

government departments who wish to purchase IT services

Signed up with a Fortune 500company that is a world leader amongair express delivery carriers

Software Services


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Software Services

Chosen to work with Texas Instruments, the world leader in real-time

technologies

Successfully designed, developed and deployed an online insurance

loyalty portal for a large Fortune 100insurance company in Japan

Successfully implemented a web-based online funds transfer

application for an insurance industry major

Partnered with Aizawa Koatsu Concrete KK, to develop new

applications including logistics management and sales and

purchase systems


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Banking Products

Infosys core banking solution, FinacleTM

was implemented in

Cosmos Cooperative Bank, one of Indias oldest banks, and ABNIndia

Entered into an agreement with ICICI to offer Indias first end-to-end

financial fulfilment product, enabling online financial transactions

between enterprises

Forged a strategic partnership with Accenture, Nigeria, for delivery

of services and solutions


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Human Resources


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Human Resources

Total employees strength at 10,663 as on December 31, 2001, up

from 9,831 as on March 31, 2001 and 8,910 as on December 31, 2000

Net addition of 109 employees during the quarter as compared to

607 during the quarter ended September 30, 2001

151 lateral employees joined during the quarter

9,361 software professionals as on December 31, 2001, up from8,656 as on March 31, 2001 and 7,824 as on December 31, 2000


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Infrastructure


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Infrastructure

Capital expenditure of Rs. 53.05 cr was incurred during

the quarter

As of December 31, 2001, the company had 22,39,500 sq. ft of

space capable of accommodating 11,350 professionals and

13,00,000 sq. ft under construction including the Infosys

Leadership Institute


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Outlook for the Future


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Indian GAAP

Quarter ending March 31, 2002

Income from software development services and products expectedto be between Rs. 636 cr and Rs. 660 cr

Earnings per share expected to be between Rs. 30.00 and

Rs. 32.00

Fiscal year ending March 31, 2002

Income from software development services and products expectedto be between Rs. 2,560 cr and Rs. 2,584 cr

Earnings per share expected to be between Rs. 120.00 and

Rs. 122.00


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Summary


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Summary

Reported a comfortable quarter

Pricing pressure continues

Business environment remains challenging

Effective cost management

Established new alliances with world leaders in various domains

Prepared to seize business opportunities


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Thank You

Documents

Performance of Infosys for the Third Quarter Ended December 31,