Infosys sales slump for first time

Infosys Technologies Ltd announced its first annual drop in dollar sales for the March 2009 quarter, sending shares of the Indian information technology bellwether to their biggest slump in five years.

Revenue in the year ending 31 March will fall 3.1 per cent to 6.7 per cent to range between $4.35 billion and $4.52 billion, Bangalore-based Infosys, India's second-largest software- services provider, said on Wednesday.

Infosys added that it expects to reduce prices as the worst recession in six decades in North America and Europe, which contribute 90 per cent of the company's sales, forces clients to trim spending. The software provider may also face stiffer competition in India after the sale of Satyam Computer Services Ltd to Tech Mahindra Ltd, which could introduce a fresh competitor in the market.

Customers are taking as long as 15 months to decide on orders, chief operating officer S D Shibulal told reporters, while chief financial officer V Balakrishnan projected that the company's prices would fall 6.5 per cent this fiscal.

The officials said earnings per share would be Rs96.65 to Rs101.18 this fiscal year, less than the Rs98.3 to Rs102  predicted by analysts. But the rupee's 21 per cent drop against the dollar in the year ended 31 March bolstered the value of overseas earnings in the fiscal fourth quarter.

Fourth-quarter sales climbed 24 per cent to Rs5,640 crore. In January, the software exporter had forecast revenue of Rs5,490-5,700 crore and earnings per share of Rs26.49 for the three months ended 31 March.