Bangalore, April 13
Infosys disappointed investors on Friday with a weaker-than-expected revenue growth outlook due to an uncertain global economy, sending its shares plunging more than 12 percent in their biggest fall in nearly three years.

The forecast from India's no. 2 software services exporter sparked worries about prospects for the country's $100 billion outsourcing sector, which faces slowing demand from its western clients, intense competition from global rivals and volatile currency markets.

Shares in Infosys, once seen as a sector trendsetter, plunged as much as 12.5% by 2:51 p.m., the biggest one-day fall since May 2009, to Rs 2,405. The fall wiped off more than $3 billion from the company's market value. The BSE Sensex was down 1.4%.

Infosys said it expects dollar revenues to grow 8-10 percent for the year ending March 2013 to $7.55 billion-$7.69 billion, lower than most analysts' expectations of 10-15 percent growth.

"Clearly, there is no immediate recovery in sight for the industry with expectations that the environment will continue to remain challenging," said Dhiraj Sachdev, senior fund manager at HSBC Asset Management in Mumbai.

Infosys reported a consolidated net profit of Rs 2,316 crore for the fourth quarter ending March 31, a 27.4% rise over Rs 1,818 crore reported in the same quarter of fiscal 2010-11. However, sequentially, net profit fell 2.4%. Revenues rose 22% to Rs 8,852 crore for the quarter from Rs 7,250 crore in the year-ago period. Sequentially revenues dipped 4.8% compared to Rs 9,298 crore in the previous quarter.

EPS was Rs 40.54 for the quarter – a quarter-on-quarter decline of 2.3% and year-on-year growth of 27.4%. 

Hong Kong/New Delhi, April 13
Power Construction Corporation of China has signed a $2.4 billion contract to build the second phase of a massive coal-fired power complex in southern India to help meet soaring local demand for electricity, the firm said on Friday.

China has been playing an active role in power project construction overseas, particularly in developing countries, taking advantage of state financing as well as experience and technology acquired through three decades of economic boom.

Many Indian power companies have been ordering equipment from overseas, especially from China, as India's power gear makers have struggled to compete on price. After losing out to Chinese rivals, Indian manufacturers have been lobbying the government to impose duty on equipment imports.

The second phase of the project for India's Infrastructure Leasing & Financial Services Ltd (IL&FS) will include the addition of four generators each of capacity 660 megawatts, the Chinese group said on its website.

The deal is an EPC contract, meaning Power Construction Corp, a sprawling enterprise under the direct supervision of China's central government, will be responsible for engineering, procurement and construction. It said the project will create more than 10,000 jobs in India and use power equipment made in China.

COAL SHORTAGE: IL&FS said it would import coal from Indonesia, Australia and South Africa to fuel the plant, the first phase of which included two generators each with capacity of 600 MW, and is scheduled to commence commercial operations by June next year. It has acquired a mine in Indonesia to supply the generators.

IL&FS plans to sell the power from the project to state-run distribution companies on a long-term basis as well as in the open market. — Reuters

New Delhi, April 13
India's trade deficit is seen at $185 billion in the 2011/12 fiscal year on higher crude import bill, the trade minister said citing provisional data, which may worsen the country's current account balance and further weaken the rupee.

Asia's third-largest economy imports nearly 80 percent of its crude oil needs, leaving it vulnerable to the vagaries of the oil market.

"The trade deficit is primarily because of the crude oil prices.... It is beyond us to control or regulate the crude prices in the foreign market," Commerce & Industry Minister Anand Sharma said Friday.

Full-year exports have topped $300 billion, Sharma said, exceeding the target of around 20% export growth set by the government despite a slowdown in the major export destinations such as the United States and Europe.

However, imports have surged to $485 billion during April-March, a jump of 38.2 percent from the previous year. Apart from the crude bill, gold imports of nearly $59 billion have also helped widen the trade deficit.

In 2010/11, Indian imports rose 21.6% from a year earlier to $350.7 billion, while exports grew 37.6% on year to touch nearly $246 billion. With imports far outstripping exports, India's current account gap has steadily widened since last April. — Reuters

Beijing, April 13
China's economic growth fell to its lowest level in nearly three years in the first quarter but analysts said the economy should rebound in coming months. Growth in the world's second-biggest economy declined to a still-robust 8.1 per cent in the three months ending in March, data showed Friday. That was down from the previous quarter's 8.9 per cent and the weakest rate since the second quarter of 2009.

China's rapid growth has declined steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation.

An uncontrolled slump could have global repercussions, hurting demand for oil, industrial components and consumer goods at a time when US and European growth are weak. It also might fuel political tensions in China as the ruling Communist Party prepares for a sensitive, once-a-decade handover of power to younger leaders.

``This quarter's growth was pretty weak,'' said IHS Global Insight analyst Xianfang Ren. ``Starting from next quarter, growth should strengthen.''

The World Bank and private sector analysts expect China to achieve a ``soft landing,'' with growth rebounding later this year. But some worry growth might fall too abruptly, raising the risk of job losses.

Last year's unexpectedly sharp plunge in demand for China's exports due to U.S. and European economic woes prompted communist leaders to reverse course and ease controls on bank lending to help struggling manufacturers.

``The `soft landing' scenario is very likely,'' said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong.

The World Bank and International Monetary Fund expect 8.2% growth for China this year, below 2010's explosive 10.4% expansion but far ahead of the low single-digit forecasts for the United States, Japan and Europe.

Other data showed Chinese factory activity, retail sales and exports accelerating over the course of the first quarter, though still weaker than last year. — AP

San Francisco, April 13
Google Inc announced a stock split designed to preserve the control of co-founders Larry Page and Sergey Brin over the world's no. 1 Web search engine, asking investors to trust their long-term vision.

The surprise decision, which its board unanimously approved, came as the company exceeded Wall Street's profit expectations but revealed a worrying 12% drop in search advertising rates - the second consecutive quarterly decline.

Shares of Google, which finished Thursday's regular session at $651.01, rose to $653 in after-hours trading.

The announcement came just as Page completed a year in the chief executive's seat for the second time, during which he spearheaded the $12.5 billion acquisition of Motorola Mobility and launched a social network to take on Facebook.

"This stock split dividend, a dividend of a nonvoting shares, is really just so the company can maintain control," BGC analyst Colin Gillis said.

Google said its board of directors has approved a 2-for-1 stock split. Investors will get a dividend of one share of the new, nonvoting "Class C" stock for each existing Google share. The new shares, to be listed on Nasdaq under a separate ticker, will be available for corporate uses such as equity-based compensation for employees, in which case they would not dilute the share base. — Reuters