Infosys Profit Growth Limited to 33% : Due to Recession

Infosys, the second largest IT exporting company in India, suffered a major set back  due to the fall of profit to 33%, which is lower than the company expected in the previous quarter of economic year.The main reason for the fall in the profit of the company is the economic crisis in the European countries.The company expected  better performance in the third quarter of the economic year because of the fall of Indian rupee against the US dollar.

The profit obtained by the company in the third quarter of the economic year which was ended in the date December 31 , 2011 was  around 33.3%. The total profit of the company is 2372 crore Indian rupees , which was way too less than what the company expected. The CEO of Infosys S. D Shibulal said that the reason behind the reduction in the expected profit is due to the European economic crisis. The economic crisis in the Europe begin from the Grease and now it is spreading to more countries.

Infosys Profit Growth Limited to 33% : Due to Recession

Infosys Trivandrum

The investors expected a much more better performance from the Infosys as the Industrial growth in the country shows an increase from the previous month. In November the industrial growth was 5.9% against the 4.74% in the October.  In December 12 Infosys become the most valuable company in the Indian share market by overcoming Reliance Industries.But after the weak performance of the company in the third quarter of the economic year the share value falls by 8.4%.Due to this Infosys lost its first position in the Indian share market and Reliance retained its No.1 spot. Now the market value of Infosys is 148642  crore Indian rupees.

IT fields are facing set back due to the recession in the European market. Indian IT Companies are obtaining  more than 50% of their income from Europe an America. In the year 2008 IT companies suffered a major loss because of  recession.Now they are also facing the same problems but the magnitude is much lower.The CEO of Infosys saying that the company is expecting that the European countries will overcome the recession soon.

Infosys IT company Share's get beating at Bombay Stock Exchange ( BSE)

Infosys Banglore

The company is now expecting an income rise of 16.4% in dollars  which when calculated in October was around 17.1-19.1% in dollar. The reason for the reduction is found to be due to recession. As per the statistics from December  31 the value of a single share of Infosys is 41.51 Indian rupees. The total profit of the company in the third quarter of the year is 9,298 crore Indian rupees. Since Infosys is the second largest IT company in India it provided job for 9655 engineering and science graduates , maybe this Loss in the companies profit may cause Some problems for the New Recruiters from Engineering and Science college’s. Also just like last time maybe some Staff’s will be sacked back.

The one reason behind the improvement in the profit of the company is because of the fall of the Indian rupee against the US dollar. The chief financial officer of the Infosys V.Balakrishnan said that the fall of the Indian rupee against the US dollar will directly influence the industries like IT. The investors expected a lot more improved performance from the company in this situation. Almost all IT companies from India faced a set back in the share market yesterday , ie, 12 January 2012. Companies  like TCS and Wipro also lost their share values in bombay Stock Market. Investors are now expecting an improved performance from Infosys in the fourth quarter of the economic year.