Jan. 11 (Bloomberg) -- Infosys Technologies Ltd., India's second-largest computer services provider, said orders from banks, brokerages and insurance companies drove profit growth as the U.S. subprime collapse hasn't yet curbed earnings.

Infosys, based in Bangalore, said it will know next month how much the slump in the U.S. housing market that has triggered $100 billion of losses among its biggest clients will dent profit. The company fell in Mumbai trading after third-quarter sales missed analysts' estimates, UBS AG, JPMorgan Chase & Co. and Citigroup Inc. said.

``We've had price increases in the banking, financial services and insurance segment, we've had customer additions,'' Chief Executive Officer S. Gopalakrishnan said in Bangalore. ``As of now, the situation is positive.''

Goldman Sachs Group Inc. said this week that the U.S. economy, the source of more than half Infosys's revenue, probably slipped into recession. That may pare earnings from U.S. clients led by Citigroup.

``We still do not know the full impact of the U.S. subprime crisis,'' said Mahesh Patil, who helps manage $800 million at Birla Sunlife Asset Management Co. ``We have reduced our weightage because of the concerns on slowdown in the U.S.''

Infosys today reported that net income climbed 25 percent to 12.3 billion rupees ($313 million), or 21.47 rupees a share, in the three months ended Dec. 31, from 9.83 billion rupees, or 17.24 rupees, a year earlier.

Sales Performance

Sales at the company, which manages computer networks and call centers for overseas clients including General Electric Co. and ABN Amro Holding NV, rose 17 percent to 42.7 billion rupees, missing the 43.4 billion rupee median estimate of analysts.

The software exporter's American depositary receipts fell $2.70, or 6.3 percent, to $40.14 at 4 p.m. New York time in Nasdaq Stock Market trading. The decline is the biggest in two months.

Infosys earlier dropped 1.4 percent to 1,580 rupees at the close of trading in India, after swinging between gains and losses. Infosys declined 21 percent last year on the Bombay Stock Exchange, the worst performer on the benchmark gauge, after the rupee gained 12.3 percent, the most in more than three decades, crimping the value of earnings repatriated from the U.S. The currency's appreciation slowed to 1 percent in the last quarter.

This year, revenue garnered from managing networks and operating call centers for banks and financial services providers may be trimmed as the world's largest lenders and securities firms record losses following the collapse of the U.S. subprime mortgage market.

Spending

Discretionary spending by the finance sector accounts for about 8 percent of Infosys's total revenue, Chief Operating Officer S.D. Shibulal told reporters in Bangalore today.

Infosys raised its profit forecast for the year ending March 31 to 81.07 rupees a share. In October, the software maker said earnings would be 79.49 rupees to 79.88 rupees a share under Indian accounting rules.

Sales for the year will be 166.3 billion rupees to 166.5 billion rupees, Infosys said, higher than its Oct. 11 estimate.

Infosys's forecast disappointed some investors. Revenue this year will climb to 169.2 billion rupees, with profit of 79.60 rupees a share, Harmendra Gandhi, an analyst at Lehman Brothers Inc. in Mumbai, estimated before Infosys reported.

Infosys will know by early next month the impact of the subprime crisis on the financial and insurance sector in the U.S., its biggest source of revenue, Ashok Vemuri, head of the division, said in an interview.

Revenue from the sector increased to 36.8 percent of the quarter's sales, from 36.5 percent in the previous three months.

Banking Sector

Meanwhile, U.S. and European companies are likely to award more contracts to overseas service-providers this year, Gopalakrishnan said in an interview, citing a poll of clients.

The segment's growth is ``reassuring in the current macro environment,'' Govind Agarwal, an analyst at UBS, told clients.

Operating profit as a percentage of sales, a measure of profitability, expanded to 29 percent for the three months ended Dec. 31, from 27.8 percent for the quarter ended Sept. 30, Infosys said.

Tata Consultancy Services Ltd., India's largest computer- services provider, will probably report a 19 percent gain in third-quarter profit, according to the median estimate of 15 analysts surveyed by Bloomberg. Mumbai-based Tata Consultancy is scheduled to report results on Jan. 16.

Bangalore-based Wipro Ltd., which is ranked third, is likely to say profit gained 16 percent, the analysts forecast. Wipro will report on Jan. 18.

To contact the reporter on this story: Harichandan Arakali in Bangalore at harakali@bloomberg.net

Last Updated: January 11, 2008 16:05 EST