Bangalore-based Infosys, one of the most closely watched IT companies, today posted a better-than-expected 33.3 percent growth in Q3 net profit to Rs 2,372 crore. The topline for IT bellwether grew 30.8 percent year-on-year and 14.8 percent sequentially to Rs 9,298 crore during the quarter.                     

Analysts attribute the growth in profits mainly to the rupee depreciation. “Since majority revenue comes from exports of services, Infosys and other companies are bound to witness a jump in profitability in the current scenario,” says Praveen Bhadada, Director, Zinnov Management Consulting.       

In the back of a severe European crisis, the company lowered its dollar revenue guidance for the fiscal ending March 31, 2012 to grow 16.4 percent; down from 17.1 percent to 19.1 percent projected in Q2 ended September 2011.     

“In the larger scheme of things, these are defining times for Infosys and others. With the European crisis not showing immediate signs of recovery, the next few quarters could be challenging. Only companies with strong fundamentals, customer relevance, distinguishing business models and deep customer connects will witness strong growth. Companies will have to undergo a fundamental shift in how they view the IT services business going forward,” says Bhadada.           

Some analysts believe the weakening of the rupee is not the only factor for the growth in profits. According to Partha Iyengar, VP and Regional Research Director at Gartner, “Infosys results show an underlying strength in the offshore paradigm, regardless of naysayers. Profitability growth of 33 percent is obviously driven by more than just an 8 percent currency drop. The head-winds of the severe EU issues are undoubtedly there, but, similar to the 2009 recession, this is going to be a test of the Indian companies’ willingness to aggressively position themselves as part of the solution from the perspective of lowering the cost of IT for enterprises in the Euro zone, as opposed to being a part of the problem and being a part of the ‘cut backs’.”

Commenting on the macro-economic environment, SD Shibulal, CEO and Managing Director, Infosys said, “The global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry. Notwithstanding short-term challenges, we are focused on long-term growth opportunities by investing in platforms and solutions - which will accelerate innovation, enhance returns for our clients and deliver higher business value.”         

Infosys added 3,266 employees during the quarter to take the total headcount to 145,088. It also claimed to maintain its earlier forecast of adding 45,000 gross employees in this fiscal year. It added 49 clients during the quarter which totals to 665 clients as of December 31, 2011.                      

On the technology front, Infosys continued to gain momentum in the areas of cloud, mobility and its core banking solution, Finacle. The company’s cloud practice won 15 deals during the quarter while Finacle won 10 deals.