Infosys profit down on visa investigation

Oct 11, 2013 by Kay Johnson

Indian IT outsourcing giant Infosys posted a fall in quarterly profit Friday after setting aside funds for a visa-abuse investigation in the United States. Still, the company upgraded its revenue forecast for the year, pleasing investors.

Shares in Infosys rose 4 percent in Mumbai after the raised the low end of its revenue growth forecast to 9 to 10 percent for the fiscal year ending March 2014, up from 6 to 10 percent.

Infosys said for the July-September quarter dropped 11.1 percent from the previous year to $383 million.

Part of that fall was due to $35 million set aside for the possible resolution of an ongoing dispute with U.S. authorities over whether it misused temporary visas to bring Indian workers into its largest market.

"Infosys is engaged in discussions with the U.S. Attorney's office and other government departments regarding a civil resolution of the government's investigation into the company's compliance" with temporary visas for tech workers known as B-1 visas, Infosys said in an addendum to its quarterly report.

Without that $35 million provision, net profit for the quarter would have been down 2.7 percent. The company said it could not comment further on the investigation because it is ongoing.

Labor advocates say the temporary visas for technology workers in the U.S., known as B-1 visas, are used by Indian outsourcers to bring in cheap software experts in to work in the U.S. instead of hiring American workers. Outsourcers argue that they need their own experts to install software developed in India.

Infosys posted year-on-year of 15 percent to $2.1 billion. The positive numbers prompted the company to upgrade its annual revenue outlook, though it remained conservative because company officials said the next two quarters are traditionally weak. Infosys shares rose 4 percent to 4,209 rupees on the Bombay Stock Exchange.

The company also reported landing 68 new clients in the quarter, including five worth more than $50 million each that are expected to increase in the long-term.

In local currency terms, Infosys posted modest profit growth of 1.6 percent in profit for the quarter, thanks to the sharp depreciation of the Indian rupee that lost one-sixth of its value earlier this year, though it has somewhat recovered.

Indian outsourcers benefit from a weak rupee because most of their business comes from the United States and Europe and is paid in dollars and euros.

Explore further: Netflix unveils new way to share recommendations

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Infosys profits up slightly despite currency woes

Jul 12, 2013

Indian software outsourcing giant Infosys posted slightly higher quarterly profit Friday and maintained its revenue growth forecast despite the weak rupee and uncertainty about U.S. visas for its employees.

Infosys profit up 5 percent, misses expectations

Oct 12, 2012

Profit at India's Infosys Technologies rose 4.9 percent in dollar terms for the September quarter, the company said Friday, missing expectations amid tepid demand from global clients struggling with economic uncertainty.

India's Infosys cuts revenue outlook, shares tumble

Jul 12, 2012

Shares in Indian software giant Infosys fell more than eight percent on Thursday after the company announced a surprise cut its full-year revenue outlook and reported a lower-than-expected profit.

India's Infosys shares fall on US probe worries

Apr 23, 2012

Shares in Infosys, India's second-largest outsourcing firm, fell four percent in Mumbai on Monday after the firm revealed that US authorities were probing alleged irregularities in its business visas.

Recommended for you

Netflix unveils new way to share recommendations

5 hours ago

Netflix is giving its Internet video subscribers a more discreet way to recommend movies and TV shows to their Facebook friends after realizing most people don't want to share their viewing habits with large ...

Job listing service ZipRecruiter raises $63 million

Sep 01, 2014

ZipRecruiter, a California start-up that tries to simplify tasks for recruiters, has raised $63 million in initial venture capital funding as the 4-year-old service races to keep up with growing demand.

User comments : 0