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Infosys Technologies, India’s second-largest software exporter, on Wednesday reported a 31 per cent rise in third-quarter net profit on strong demand for information technology outsourcing services.

Net profit in the three months to December advanced to Rs6.49bn ($143m) from Rs4.97bn in the same quarter last year while revenues moved up to Rs25.32bn from Rs18.76bn, an improvement of 35 per cent, in line with analysts’ expectations.

Nandan Nilekani, chief executive and president, was upbeat about the company’s performance in the near future.

“The pricing environment will remain stable with an upward bias,” he told the press in a conference call on Wednesday.

Infosys, which added 36 customers in the quarter, also reported an improvement in earnings per share, which rose from Rs22.26 in the previous quarter to Rs23.68 , a growth of 6.4 per cent.

The company employed 3,226 more people in the three months, taking the company’s total headcount to 49,422 people.

Its employee utilisation rate dropped to 78.7 per cent in the quarter to December from 79.3 per cent a year ago and 79.1 per cent in the quarter to September.

But V Mohandas Pai, chief financial officer, defended the rate. “Seventy eight per cent utilisation is a sweet spot as it gives you potential to grow at 3-4 per cent. If we had a 81 per cent utilisation growth could suffer. While 76 per cent could be much better, inefficiencies could creep into the system”, he said.

India’s information technology industry faced a shortfall of 500,000 professionals by 2010 which threatened its dominance of global offshore IT-services, business consultancy McKinsey and Nasscom, India’s leading IT association, warned last month.

Multinationals, such as Microsoft and JPMorgan, are increasing their presence in the world's largest offshore services industry, adding to labour-market pressures caused by a widening mismatch between the supply and demand for technology talent.

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