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Infosys cuts prices as CEO takes a back seat

Results holding steady...
Written by Sally Watson, Contributor

Results holding steady...

IT entrepreneur Narayana Murthy is stepping down as chief executive of Infosys, India's second largest software exporter, after 21 years in the job. One of the original founders of the company, Murthy is retiring to the president's chair and the role of 'chief mentor and goodwill ambassador', according to his successor, managing director and COO, Nandan Nilekani. K. Gopalakrishnan, currently deputy managing director, will take over as COO during the changeover on 31 March. Both Nilekani and Gopalakrishnan are co-founders of the company. Murthy became one of India's best known high-tech figures after his company became the first Indian firm to float on Nasdaq and the first to offer share options to its employees. The news broke as Infosys released steady results for the third quarter ending 31 December. Revenues rose to $137.6m, up 19.7 per cent from Q3 2000, but up only slightly on the previous quarter's $135m. Nilekani said he was pleased Infosys was holding steady in the current market: "There has been great pressure on our billing rates from customers and we've had to cut prices, but we've also signed up 33 new customers this quarter." The company's net profit for the quarter was $41.7m, up from £41.3m for the last quarter. The company's recent shift towards targeting Europe has paid off, with revenues from the region rising to become 19.4 per cent of total sales, up from 18.9 per cent in Q2. Sales in the telecom and banking sectors continued to suffer, with the insurance and healthcare markets performing most strongly. Nilekani recently told silicon.com he will be targeting public sector contracts in the UK because they offer stability and better long-term prospects in the current economic climate. The company expects revenues to remain flat for the next quarter, with Nilekani reluctant to predict when the market will pick up: "Your guess is as good as mine," he admitted.
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