Performance of Infosys for the Second Quarter
and Half Year ended September 30, 2001
Nandan M. Nilekani
Managing Director, President
and Chief Operating Officer
10-October-2001
Safe Harbour
Certain statements in this release concerning our future growth prospects are forwardlooking statements which involve a number of risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking statements. The risks
and uncertainties relating to these statements include, but are not limited to, risks and
uncertainties regarding fluctuations in earnings, our ability to manage growth, intense
competition in IT services including those factors which may affect our cost advantage,
wage increases in India, our ability to attract and retain highly skilled professionals, time
and cost overruns on fixed-price, fixed-time frame contracts, client concentration,
restrictions on immigration, our ability to manage our international operations, reduced
demand for technology in our key focus areas, disruptions in telecommunication networks,
our ability to successfully complete and integrate potential acquisitions, liability for
damages on our service contracts, the success of the companies in which Infosys has
made strategic investments, withdrawal of governmental fiscal incentives, political
instability, legal restrictions on raising capital or acquiring companies outside India, and
unauthorized use of our intellectual property and general economic conditions affecting our
industry. Additional risks that could affect our future operating results are more fully
described in our United States Securities and Exchange Commission filings 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 quarter ended June 30, 2001. This filing is available at www.sec.gov.
Infosys may, from time to time, make additional written and oral forward-looking
statements, including statements contained in the company’s filings with the Securities and
Exchange Commission and our reports to shareholders. The company does not undertake
to update any forward-looking statement that may be made from time to time by or on
behalf of the company.
Agenda

Financial Performance

Operational Performance

Client acquisition and significant projects undertaken

Human resources

Infrastructure

Outlook for the future
Financial Performance
The Quarter at a Glance
(Indian GAAP)
650.13
446.10
Q2 01
638.27
176.42
441.26
Q2 02
Total income
(Rs.cr)
Q2 01
258.92
Q2 02
Exports
(Rs.cr)
Q2 01
Q2 02
Operating profit
(Rs.cr)
The Quarter at a Glance
(Indian GAAP)
201.56
234.56
30.47
154.01
23.28
171.76
Q2 01
Q2 02
PBT
(Rs.cr)
*From ordinary activities
Q2 01
Q2 02
PAT*
(Rs.cr)
Q2 01
Q2 02
Basic EPS*
(Rs)
Highlights (Indian GAAP)
FY2002 FY2002 FY2001
Q2
Q1
Q2
Income
(Rs.cr)
% growth over
Q1 02
Q2 01
650.13
612.52
446.10
6.1
45.7
S/w development expenses 306.95
285.56
204.57
7.5
50.0
Gross profit
343.18
326.96
241.52
5.0
42.1
S,G&A expenses
84.26
86.44
65.10
(2.5)
29.4
Operating profit
258.92
240.51
176.42
7.7
46.8
39.01
35.48
24.24
10.0
61.0
219.91
205.03
152.18
7.3
44.5
14.66
13.50
19.58
8.6
(25.1)
234.56
218.53
171.76
7.3
36.6
33.00
28.50
17.75
15.8
85.9
PAT from ordinary activities 201.56
190.03
154.01
6.1
30.9
Depreciation
Operating profit after
depreciation
Other income
PBT
Provision for tax
Half Year at a Glance
(Indian GAAP)
1262.65
801.63
H1 01
1234.58
314.06
792.32
H1 02
Total income
(Rs.cr)
H1 01
499.43
H1 02
Exports
(Rs.cr)
H1 01
H1 02
Operating profit
(Rs.cr)
Half Year at a Glance
(Indian GAAP)
391.59
453.09
59.19
275.31
42.45
306.77
H1 01
H1 02
PBT
(Rs.cr)
*From ordinary activities
H1 01
H1 02
PAT*
(Rs.cr)
H1 01
H1 02
Basic EPS*
(Rs)
Highlights (Indian GAAP)
FY2002
H1
Income
% FY2001
H1
(Rs.cr)
% Growth
1262.65
100.0
801.62
100.0
57.5
S/w development expenses
592.51
46.9
375.42
46.8
57.8
Gross profit
670.13
53.1
426.20
53.2
57.2
S,G&A expenses
170.71
13.5
112.15
14.0
52.2
Operating profit
499.43
39.6
314.06
39.2
59.0
74.49
5.9
41.97
5.2
77.5
424.94
33.7
272.08
33.9
56.2
28.15
2.23
34.69
4.3
(18.9)
453.09
35.9
306.77
38.3
47.7
61.50
4.9
31.46
3.9
95.5
391.59
31.0
275.31
34.3
42.2
-
-
5.49
0.7
-
391.59
31.0
280.81
35.0
39.5
Depreciation
Operating profit after
depreciation
Other income
PBT
Provision for tax
PAT from ordinary activities
Extraordinary items
Net profit after ext. items
Highlights

Q2 FY 02
H1 FY 02
72.3%
56.7%
45.7%
30.9%
57.5%
42.2%
62.6%
46.3%
40.1%
26.0%
50.3%
35.1%
26
28
54
95.2%
90.0%
92.5%
315
116
9,947
833
607
10,554
1,148
723
10,554
Indian GAAP


Q1 FY 02
Y-O-Y Growth
 Income
 PAT from ord. activities
US GAAP

Y-O-Y Growth
 Revenues
 Net income

New clients

Repeat business

Headcount

Gross addition

Net addition

Period end headcount
Balance Sheet Summary
Sep 30, 01
LIABILITIES
Shareholders’ funds*
Total liabilities
ASSETS
Fixed assets
Investments
Deferred tax assets
Current assets
Cash & equivalents
Accounts receivables
Other current assets
Less: Current liabilities
Net current assets
Total assets
% Sep 30, 00
(Rs.cr)
%
1,742.49
1,742.49
100
100
1,094.04
1,094.04
100
100
713.66
44.44
18.64
41
3
1
365.19
45.73
-
33
4
-
714.85
343.60
336.10
(428.80)
965.75
1,742.49
41
20
19
(25)
55
100
535.90
243.06
176.94
(272.78)
683.12
1,094.04
49
22
16
(25)
62
100
Region wise Revenue (%)
FY2002 FY2002 FY2001 FY2002
Q2
Q1
Q2
H1
FY2001
H1
LTM
Sep01
LTM
Sep 00
North America 71.1%
72.2%
75.0%
71.6%
74.7%
72.1%
76.1%
Europe
18.9%
19.8%
18.1%
19.4%
17.7%
19.5%
16.3%
India
1.8%
2.6%
1.1%
2.2%
1.2%
1.9%
1.3%
Rest of
the world
8.1%
5.3%
5.8%
6.8%
6.4%
6.5%
6.3%
Total
100.0% 100.0%
LTM – Last Twelve Months
100.0% 100.0%
100.0% 100.0% 100.0%
Operational Performance
Utilization Rates
80.0
70.0
69.5
68.8
73.2
72.7
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Including training
Excluding training
Q1 FY 2002
69.5
73.2
Q2 FY 2002
68.8
72.7
Q1 FY 2002
Q2 FY 2002
Revenues by Project type
FY2002 FY2002
Q2
Q1
Fixed Price
FY2001 FY2002 FY 2001
LTM
LTM
Q2
H1
H1 Sep 01 Sep 00
29.9%
27.0%
27.6%
28.5%
27.1%
28.7%
29.3%
Time & Materials 70.1%
73.0%
72.4%
71.5%
72.9%
71.3%
70.7%
100.0%
100.0%
Total
100.0%
100.0% 100.0% 100.0% 100.0%
Onsite-Offshore Revenue split
FY2002
Q2
FY2002 FY2001
Q1
Q2
FY2002
H1
FY2001
H1
LTM
Sep 01
LTM
Sep 00
Onsite
50.3%
50.5%
54.6%
50.4%
53.7%
50.1%
52.2%
Offshore
49.7%
49.5%
45.4%
49.6%
46.3%
49.9%
47.8%
100.0% 100.0%
100.0%
100.0%
Total
100.0%
100.0% 100.0%
Customer Concentration
FY2002 FY2002 FY2001 FY2002 FY2001
Q2
Q1
Q2
H1
H1
Top client contribution
to revenues
6.4%
6.7%
7.7%
6.6%
7.4%
Top 5 client contribution
to revenues
25.3%
27.4%
24.9%
26.1%
24.4%
Top 10 client contribution
to revenues
39.7%
43.7%
38.0%
41.2%
36.9%
Million dollar clients*
84
84
57
84
57
Five million dollar clients*
22
21
12
22
12
Ten million dollar clients*
14
11
6
14
6
*LTM
Diversifying Customer Risk
277
270
293
240
210
180
150
120
90
60
30
26
28
Q1 FY 2002
Q2 FY 2002
0
New Customers
Active Clients
Accounts Receivables
Year
AR
(mn$)
% of
Operating Revenue
DSO
H1 FY 02
71.81
13.6
50
H1 FY 01
52.82
15.2
55
FY 2001
64.94
15.9
58
Other Highlights

Software revenues in US dollar terms grew by 5.2% during the
quarter over the quarter ended June 30, 2001. Revenue growth
comprised volume growth of 2.6% and price growth of 2.6%, as
compared to the quarter ended June 30, 2001

Interim dividend of Rs. 7.50 per share (150% on an equity share of
par value of Rs. 5 per share) declared by the Board
Client Acquisition and
Significant Projects Undertaken
Client Acquisition

Client acquisitions during the quarter was 28 as compared to 26 in
Q1 of FY 2002

Strengthened presence in the financial services industry through strategic
services like



Post merger integration for UFJ Holdings, The Sanwa Bank, The Tokai Bank and the
Toyo Trust and Banking Company

Straight through processing – a mission critical application development project for
a leading financial institution

Security consulting for Bank Muscat, one of the largest banks in Oman
Other prestigious clients added in the financial services industry include

DGZ DekaBank, the largest investment bank in Germany

ING Group

Royal Bank of Canada Financial Group, the largest and oldest financial institution in
Canada
Won its first consulting engagement in the government sector with an
assignment for UK Government’s National Health Service
Projects Undertaken

Currently working with Lear Corporation and Visteon, two of the largest
automotive suppliers in the world

Started work for the Japan-based JGC Corporation, a fully integrated
engineering procurement construction company

Won engagements from a leading apparel company and a large office
supplies superstore in the US

Other prestigious clients in the retail sector include


Trader Joe’s, a US-based speciality grocer

McCain Foods, a diversified foods major based in Canada

Pier 1 Imports, one of the leading retailer of gifts and home furnishings located
in the US
Vivendi Water Systems, the world’s largest water company and Dentsu
MarchFirst, the IT subsidiary of Dentsu Inc., a leading advertisement major
in Japan are other significant clients added during the quarter
Banking Products

Successfully deployed FinacleTM, Infosys’ core banking solution, for
Kenya Commercial Bank, the largest bank in East Africa with over
100 branches in Kenya and a presence in Tanzania

Successfully completed the implementation of BankAway corporate
banking and WAP banking at National Bank of Abu Dhabi, the
leading bank in the Middle East

Successfully implemented BankAway (retail banking) for IDBI
Banking
Human Resources
Human Resources

Total employees strength at 10,554 as on September 30, 2001, up
from 9,831 as on March 31, 2001 and 7,925 as on September 30,
2000

Net addition of 607 employees during the quarter as compared to
116 during the quarter ended June 30, 2001

92 lateral employees joined during the quarter

9,297 software professionals as on September 30, 2001, up from
8,656 as on March 31, 2001 and 6,941 as on September 30, 2000

Of these software professionals, 690 are undergoing training and
146 belong to the Banking Products group

Deferred the joining schedules of campus recruits to align them
with our business requirements
Infrastructure
Infrastructure

Capital expenditure of Rs. 129.77 cr was incurred during
the quarter

As of September 30, 2001, the company had 19,98,800 sq. ft of
space capable of accommodating 11,100 professionals and
15,61,000 sq. ft under construction including the Infosys
Leadership Institute
Outlook for the Future
Indian GAAP


Quarter ending December 31, 2001

Income from software development services and products is expected
to be in the range of Rs. 640 cr to Rs. 656 cr

Earnings per share is expected to be in the range of Rs. 29.00 to
Rs. 31.00
Fiscal year ending March 31, 2002

Income from software development services and products is expected
to be in the range of Rs. 2,540 cr to Rs. 2,590 cr

Earnings per share is expected to be in the range of Rs. 120.00 to
Rs. 123.00
Summary
Summary

Reported a comfortable quarter amidst turbulent conditions

Pricing pressure continues

Challenging business environment

Phased-out joining schedules of campus recruits to align with
business requirements

Effective cost management

Increase breadth and depth of services

Prepared to seize business opportunities
Thank You