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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

January 11, 2007 at 2:09 PM

Indian outsourcing giant battles the rising rupee

One of the big questions about the Indian outsourcing industry is how it will fare when wages rise and its labor cost advantage declines.

An early test of its resiliency has come with the recent increase of the rupee’s value.

Infosys said it’s weathering the storm and maintaining margins even though the currency situation increased its operating costs by 200 basis points in its third quarter.

The company reported today that earnings per share were up 50 percent — to 39 cents, from 26 cents — and sales were up 47 percent.

It’s expecting sales in the next quarter, ending in March, to grow 45 percent and earnings per share to grow 42 percent.

Infosys added 43 clients during the quarter and had a net gain of 3,282 employees.

“As our clients focus on enhancing their competitiveness, they are leveraging our capability to drive their transformation programs,” Chief Executive Nandan Nilekani said in the release.

Nilekani has been called the Bill Gates of India. He’s also friends with the real Bill and attended his CEO Summit in Redmond last year.

If Nilekani comes to the summit this year, he and the CEOs may be discussing how Infosys is transforming itself to maintain its margin.

Comments | Topics: Asia, Enterprise, Microsoft

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