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Infosys admits to facing pressure on billing rates

Our Bureau

BANGALORE, July 10

INFOSYS Technologies today admitted that it was facing a pressure on the billing rates from both existing and new customers.

Mr Nandan Nilekani, COO and Managing Director, even while admitting that the company was facing pressure on billing rates, asserted that it was looking at more volumes in order to overcome the challenges.

While the billing rates for offshore projects have gone down by nearly six per cent during the quarter, the rates for on-site projects registered a fall of nearly 1.2 per cent. However, the blended rates registered a fall of nearly 2.8 per cent, he added .

While the company faced pressures on the pricing front, it has not done any retrenchments, he claimed. The company, however, continued to strengthen its sales and marketing force and continued with lateral hiring keeping in mind the future considerations , Mr Nilekani added.

With the net addition of 116 new employees during the quarter, the total head-count stood at 9,947, against 6,445 in Q1 FY 2001. The company has chalked a phased-out joining schedules for the campus recruits in order to align them to its business require ments, Mr Nilekani said.

Plans of adding 1,500-2,000 employees on a gross basis during the current fiscal remain unchanged.

The employee utilisation rates (including training) increased marginally from 64.9 per cent in the previous quarter to 69.5 per cent during the quarter. However, (excluding training) the employee utilisation rates stood higher at 73.2 per cent (73 per ce nt in previous quarter).

E-business engagements comprised 23 per cent of the revenues during the quarter against 25.8 per cent in the previous quarter. There was also a decline in revenue contribution from start-up and venture-funded companies at five per cent as against seven p er cent in previous quarter and 17.2 per cent in Q1 2001.

Software revenues in US dollar terms grew by 8.1 per cent during the quarter over the previous quarter. Revenue growth comprised volume growth of 10.9 per cent, said Mr Nilekani.

Revenues from different types of projects remained unchanged with time and materials projects accounting for 73 per cent and fixed price ones accounting for 27 per cent. The company's list of million-dollar clients increased to 84 during the quarter. Rep eat business stood at 95.2 per cent, which is typically high in the software sector, as against 81.1 per cent in the previous quarter.

Region-wise, the North Americas continued to contribute the maximum to the company's revenues with nearly 72.2 per cent of the revenues coming from that region, whereas there was a marginal decline in revenues from the European markets at 19.8 per cent ( 20.5 per cent in Q4 FY2001).

However, the contribution from the Indian market also went up marginally from 1.7 per cent in previous quarter to 2.6 per cent. This is largely attributed to the stellar performance of its banking business unit.

To a question, Mr Shibulal, Director, Infosys, clarified that the company was forced to cancel some projects with certain clients for various reasons. However, ``We have been working with these clients in different areas,'' he added.