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CORRECTED-UPDATE 1-Infosys sees 18-20 pct rise in FY sales, shares fall 7 pct

Published 04/15/2011, 12:28 AM
Updated 04/15/2011, 12:32 AM
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* Q4 profit 18.2 bln rupees vs 18.81 bln rupees in Reuters poll

* Sees FY12 18-20 dollar rev growth vs 19-20 pct market view

* Human resources chief quits

* Shares fall 7 pct, broader market down 1 pct (Corrects paragraph 1 to show quarterly profit rose)

BANGALORE, April 15 (Reuters) - Infosys Technologies Ltd , India's No. 2 software services exporter, missed market estimates with a 13.7 percent rise in quarterly profit and said its human resources chief would quit the board, sending its shares 7 percent lower.

Bangalore-based Infosys expects its dollar revenue to grow 18 percent to 20 percent for the year ending March 2012. Analysts had expected the company to forecast full-year revenue growth of 19-20 percent.

"There is pressure on margins. That is a combination of both cost pressures and rupee. Even the outlook is below market expectation," said Nitin Jain, Singapore principal investment manager at Kotak Mahindra's fund management unit.

"The revenue guidance is broadly in line with expectation, but where we see some disappointment is lower earnings guidance which means there will be margin pressures."

Indian technology firms have seen a shake-up in recent months. In January, smaller rival Wipro replaced the chiefs of its key outsourcing business after struggling to keep up with peers. [ID:nSGE70J055]

By 0400 GMT, Infosys shares were 6.8 percent lower in a broader market down 1 percent.

Infosys, larger rival Tata Consultancy Services , and No. 3 Wipro have all stepped up hiring in the past few months, reflecting strong demand from clients.

However, a possible appreciation of the rupee and pay increases for employees as they battle the likes of IBM and Accenture for orders and staff, will be key concerns for export-oriented firms.

Infosys, founded in 1981 by seven engineers with $250 borrowed from their spouses, reported a net profit of 18.2 billion rupees ($408.5 million) versus 16 billion rupees a year ago.

This compares with a Reuters poll forecast for net profit of 18.81 billion rupees for Infosys , whose clients include Goldman Sachs , BT Group and BP .

Ahead of the results, Infosys shares had lost 4 percent this year versus a 2.5 percent drop in the sector index and the main index 's 3.6 percent fall. ($1 = 44.5 rupees) (Reporting by Bharghavi Nagaraju; Additional reporting by Saeed Azhar; Editing by Anshuman Daga)

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