Bangalore, India: July 11, 2007 (Wednesday) -  Infosys Technologies Ltd., who was privileged to have 35 percent jump in quarterly profit, boosted by tax gains, is worried over their profit margin due to the rising rupee.

The country's number-two software services exporter, which gets about 60 percent of its revenue from the United States, cut its full-year earnings forecast in rupee terms but revised it upwards in dollars.

"The sharp appreciation of the rupee against all major currencies impacted our operating margins during the quarter," Chief Financial Officer V. Balakrishnan said on Wednesday, adding however that the firm had still been able to charge higher rates from new customers.

"We are not seeing any concerns on the ground. Volume growth continues to be strong," he said. "We will be able to maintain the net margins for FY08 in spite of the rupee moving against us."

Nasdaq-listed Infosys cut its full-year per share earnings forecast to 78.20-79 rupees based on an exchange rate of 40.58 rupees per dollar, from 80.29-81.58 rupees estimated in April that had assumed the rupee at 43.10.

In U.S. dollar terms, it raised full-year guidance to $1.92-$1.94 per share from $1.86-$1.89 forecast in April.

Chief Executive S. Gopalakrishnan said demand for the firm's services remained strong -- the company added 35 new clients in the June quarter and over 3,700 employees -- but analysts said it was not enough to prop up the stock.

"The stock will be under pressure till the time there is some stability in the rupee and the company gives some positive news," said Dipesh Mehta, an analyst with Khandwala Securities.

Shares in Infosys, which develops applications, designs supply chains and offers back-office services, were down 3 percent at 1,959.50 rupees by 0545 GMT after falling as low as 1,925 in a weak Mumbai market.

Net profit rose to 10.79 billion rupees in the quarter ended in June, including a 510 million rupee tax write back, from 8 billion rupees a year earlier.

Full Story: http://in.today.reuters.com/news/newsArticle.aspx?ype=businessNews&storyID=2007-7-11T122608Z_01_NOOTR_RTRMDNC_0_India-284136-4.xmlCompared with the March quarter, earnings fell 5.7 percent .