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Infosys Posts Slowest Profit Growth in Eight Years Infosys Technologies Ltd., India's second-largest software-services provider, reported the slowest profit growth in at least eight years after the rupee strengthened and wages climbed. Net income rose 9.2 percent to 12.5 billion rupees ($313 million), or 21.78 rupees a share, for the fourth quarter ended March 31, from 11.4 billion rupees, or 19.95 rupees, a year earlier, Bangalore-based Infosys said today. The rupee's biggest gain in three decades in 2007 reduced the value of overseas revenue while Infosys raised salaries 15 percent to stem defections to rivals including International Business Machines Corp. a year ago. Subprime-mortgage related losses may approach $1 trillion, curbing orders from banks and finance companies that account for 30 percent of Infosys' sales. ``When you see a slowdown in the U.S., you will also see a slowdown in the willingness to outsource more in the short term,'' said Pauli Laursen, a fund manager at Sydinvest Asset Management, who has been selling Infosys shares from the $600 million in equities he manages in Aabenraa, Denmark. ``I see an outsourced project as an investment, and people or the companies will not invest more if they see their earnings fall.'' Profit matched the 12.6 billion rupee median estimate in a Bloomberg survey of 10 analysts. Sales climbed 20 percent to 45.4 billion rupees from 37.7 billion rupees. The International Monetary Fund on April 8 said losses stemming from the U.S. mortgage crisis may approach $945 billion, signaling that the worst of the credit crunch may be yet to come. Growth in U.S. information-technology spending this year will slow to 5 percent from 7 percent in 2007, according to a Goldman Sachs survey of 100 executives. Earnings Forecast Earnings will gain to 92.32 to 93.92 per share in the year that started April 1 from 81.26 rupees, the company said today. Infosys was expected to forecast earnings of 93 rupees to 94 rupees, according to estimates from Vipin Khare, an analyst at Morgan Stanley, and Diviya Nagarajan of JM Financial SK Securities Pvt. Sales may rise to 198.9 billion rupees to 202.1 billion rupees in the 12 months from 166.9 billion rupees, Infosys said. Infosys declined 29 percent in the year to March 31 on the Bombay Stock Exchange, making it the second-worst performer on the benchmark Sensitive Index, which gained 20 percent in the same period. The worst performer was larger rival Tata Consultancy Services Ltd., which dropped 34 percent. Shares rose as much as 3.45 percent in the first minute of trading and were up 0.8 percent, or 11.1 rupees, at 1,433 rupees at 9:57 a.m. Rupee Gain India's central bank may also let the rupee strengthen to curb inflation, which has reached a 3-year high, investors including A. Balasubramaniam, chief investment officer at Birla Sun Life Asset Management Co., said last month. Birla Sun Life manages assets of about $8.7 billion. That would crimp the value of Infosys's sales from its largest market. Anecdotal evidence so far has indicated that there's been ``modest'' or no growth in clients' overall budgets for 2008, Aniruddha Dange, an analyst with India Infoline Ltd. in Mumbai, said in a research note dated April 2. Decisions regarding allocation to offshoring are still to be made, he said. ``Furthermore, layoffs at major clients indicate that even the budgeted IT spend is at risk,'' he wrote. Dange, who is the top-ranked Infosys analyst according to Bloomberg data, rates the Indian information-technology sector a ``sell.'' Dange declined to be interviewed for this story.