The company, the first among the country’s IT services groups to report second quarter results for the three months ended September 30, announced that its revenue in rupee terms was expected to grow by up to 20 per cent this fiscal year compared with earlier guidance of up to 18.3 per cent. However, in terms of the dollar, the company has revised its guidance for year-on-year sales growth to up to 35 per cent from 31 per cent previously.

During the last two financial quarters Infosys missed out on its revenue guidance in rupee terms by a whisker, but the numbers are likely to surpass its own expectations in the second quarter of the current fiscal. Taking into consideration that the general business environment remains conducive, the company is not likely to witness any snag barring the appreciating rupee, which valued 2.16 percent against the dollar during the second quarter.

According to experts, the slowing of the US economy notwithstanding, expansion in IT services is projected to remain firm as worldwide IT services end user spending is forecast to exceed $730 billion in 2007, going up by 8.7 percent from 2006.

The projections from the company came as a relief for its investors who were apprehensive that a possible US economic deceleration coupled with more than 10 per cent appreciation in the rupee this year will jeopardize the Indian IT industry and related services companies.

The apprehension was genuine to some extent as the companies that offer services ranging from maintaining the hardware systems for foreign companies to processing their back office work earn the major part of their revenue in foreign currencies, but pay the bulk of their overheads in rupees.

The Infosys’ announcements will now act to reassure the Indian IT industry, as there seems to no signs of a brake in the IT spending. But experts are of the opinion that it is high time companies like Infosys come out of their conservative practices and establish some innovative business models. According to PricewaterhouseCoopers (PwC) executive director Ambarish Dasgupta this would be right time for making acquisitions as the depreciating dollar makes buyouts cheaper than ever before.

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