Infosys net up 13 percent in Q3; retains guidance

Bengaluru, Jan 9:

Infosys Ltd. Friday reported net profit of Rs.3,250 crore for the third quarter (Oct-Dec) of this fiscal (2014-15), registering 13 percent year-on-year (YoY) growth and 5 percent sequentially under the Indian accounting standard.

The global software major, however, retained its revenue guidance at 7-9 percent for this fiscal (FY 2015) at Sep 30 exchange rate of Rs.61.75 per dollar.

“Consolidated revenue is expected to grow 7-9 percent in dollar terms and 6.7-8.7 percent in rupee terms for the fiscal (FY 2015),” the company said in a statement here.

The outsourcing major has discontinued giving quarterly guidance since last fiscal (FY 2014).

The company’s consolidated revenue for the quarter under review (Q3) grew 5.9 percent YoY and 3.4 percent sequentially to Rs.13,796 crore.

Under the International Financial Reporting Standard (IFRS), net income grew 12.7 percent YoY and 2.2 percent sequentially to $522 million and gross revenue 5.6 percent YoY and 0.8 percent sequentially to $2.22 billion for the quarter.

“Our sequential revenue growth in Q3 was adversely impacted to the extent of 1.8 percent due to dollar appreciation against other major currencies,” Infosys chief financial officer Rajiv Bansal in a statement later.

The company reported 4.2 percent sequential volume growth, claiming to be the best in last three years, while operating margins at 26.7 percent was an increase of 60 basis points sequentially and 170 basis points YoY.

“During the quarter, we saw broad-based volume growth, increased utilisation and strong client additions,” chief operating officer U.B. Pravin Rao said in the statement.

The IT bellwether added 59 clients during the quarter, taking its total number to 932 till Dec 31, as against 912 a quarter ago and 888 a year ago in same period.

“We are excited by several breakthrough results in Q3. Our ‘renew and new’ strategy is being received well by our clients and our eco system. We are already seeing its early adoption,” Infosys chief executive Vishal Sikka said on the occasion.

Though the company hired 13,154 people during the quarter, exit of 8,927 employees resulted in net addition of 4,227 for the quarter, taking its total staff strength to 169,638 by Dec 31, as against 165,411 quarter ago and 158,404 a year ago.

“Based on our strong performance, we are intensifying our efforts to deepen employee engagement, client ecosystem and strengthen our foundation of education, as we build a next-generation services company that innovates for consistent profitable growth,” Sikka said on the occasion.

On annualised basis, attrition, however, increased marginally to 20.4 percent in third quarter from 20.1 percent in second quarter and 18.1 percent year ago.

To check attrition, the company gave 100 percent variable payout for Q3.

Cash and cash equivalents increased to Rs.34,873 crore ($5.65 billion) at quarter-end from Rs.33,616 crore ($5.44 billion) year ago.

The company has expanded its innovation fund to $500 million from $100 million to support the creation of a global eco-system of strategic partners.

“The (higher) capital will be used to invest into young companies worldwide innovating in areas such as AI (artificial intelligence), automation, Internet of Things (IoT), collaboration and design,” the statement added. IANS