Nilekani foresees tough year ahead

Shares in Indian software giant Infosys Technologies tumble more than 18% after a 18.6% rise in annual net profit fails to impress investors.

Profit growth at the export dependent company has been slowing, as the US economy stagnates.

Infosys managed to grow its profits by 28.5% in the year to March 2002 and 114% the year before that.

"The global delivery model has become the mainstream as offshore outsourcing gains momentum," said Nandan Nilekani, president and managing director of Infosys.

"However, the uncertainties relating to the US economy continues to have an impact on the industry growth," he said.

Profits rose to 9.6bn rupees (�130m; $203m) as revenues increased by 39% to 36bn rupees.

Infosys shares had fallen 13% in the past three months.

Outlook flat

The outlook for the coming financial year offered little comfort, with a revenue forecast of between 44.8bn to 45.7bn rupees for the year to March 2004.

"The weak economic environment coupled with the pressure on billing rates and a stronger rupee has exerted tremendous pressure on the margins," said Infosys chief financial officer T.V. Mohandas Pai.

Infosys - which has 300 clients globally and about 14,000 employees - expects to add 1,000 gross jobs in the three months to June.

It is the first major Indian software firm to report annual results in 2003.