Infosys Q3 results: Profit rises 21.35 pct to Rs 2,875 crore, beats estimates

Jan 10 2014, 21:43 IST
Comments 0
With NR Narayana Murthy at helm, Infosys is back to being IT bellwether. With NR Narayana Murthy at helm, Infosys is back to being IT bellwether.
SummaryInfosys Q3 results unveiled, guidance raised, growth projected at 12 pct.

Infosys Ltd raised its sales growth outlook for the year after posting a higher-than-expected 21.35 per cent rise in consolidated net profit for Q3 (October-December quarter) as improving US and European economies revived demand for outsourcing services.

The net profit stood at $463 million as against $434 million in the year ago period. Infosys' revenue for the quarter grew 9.9% year-on-year to $2100 million. In rupee terms, India’s second largest IT services exporter reported a 21.35% rise in consolidated net profit for the quarter ended December. The company posted a net profit of Rs 2875 crore as compared to Rs 2,369 crore in the corresponding period a year ago. Revenues grew 24.96% to Rs 13,026 crore as compared to Rs 10,424 crore in the corresponding period a year ago.

Infosys increased its guidance for dollar revenue growth in FY14, projecting a growth of between 11.5-12% as against 9-10% it had earlier expected.

“The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives.” said S D Shibulal, CEO and Managing Director, Infosys. “We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share.”

Infosys and its subsidiaries added 54 clients during the quarter and the gross addition of employees was at 6,682.

“During the quarter, we saw early but promising results of our initiatives to increase efficiency in our operations” said Rajiv Bansal, Chief Financial Officer. “We continue to remain focused on making investments necessary to secure and grow our future.”

Infosys' shares were trading at Rs 3,555.85, up more than 3 per cent at 11.15 am on the Bombay Stock Exchange.

“The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives.” said S D Shibulal, CEO and Managing Director, Infosys. “We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share.”

Infosys and its subsidiaries added 54 clients during the quarter and the gross addition of employees was at 6,682.

“During the quarter, we saw early but promising results of our initiatives to increase efficiency in our operations” said Rajiv Bansal, Chief Financial Officer, Infosys. “We continue to remain focused on making investments necessary to secure and grow our future.”

Infosys was also helped by a renewed focus on winning big-ticket contracts after a string of disappointing results led it to change a strategy of developing its own products.

Investors has raised concerns about the company's prospects after several high-profile executives left in the last six months after the company's founder, NR Narayana Murthy, returned in June last year to lead the turnaround.

Infosys is a bellwether of India's export-driven $108 billion IT outsourcing industry. Worldwide IT spending growth is expected to accelerate to more than 5 percent in 2014 after dipping last year to its slowest pace of growth since the financial crisis, according the International Data Corporation.

Infosys, whose customers include Bank of America Corp and BT Group Plc, said profit for the three months ended December 31 was Rs 2,875 core ($463 million), compared with Rs 2,369 crore a year earlier.

Infosys had reported a better-than expected sequential sales growth in dollar terms in both June (2.7%) and September (3.8%) quarters.

Infosys shares surge on stronger revenue forecast

(AP) Leading Indian IT outsourcer Infosys posted higher quarterly profit and raised its revenue projection for the year on Friday after gaining more than 50 international clients.

Shares of the Bangalore-based company surged by 3 percent after it reported net profit of $463 million, up 6.7 percent for the October to December quarter. It raised its revenue growth outlook for the financial year ending March to between 11.5 and 12 percent, up from 9-10 percent.

The robust performance raised hopes that Infosys is regaining its footing under chairman N.R. Narayana Murthy, a founder of the company who was brought back last year and has embarked on a campaign of restructuring and cost cutting.

The company said it added 54 new clients during the quarter. It reported revenue of $2.1 billion for the three months, up 10 percent over the same period last year.

Infosys was one of many Indian outsources that suffered lower spending by foreign clients during the global downturn but orders have recently picked up from the U.S. and Europe.

''We believe the global economic environment has improved and our clients are gaining confidence to invest,'' said managing director S.D. Shibulal.

Several top executives have left Infosys in the past year, including chief financial officer V. Balaknrishnan in December. The company this month named two new presidents to beef up the management team.

''The recent changes in organization structure will enable us to strengthen client relationships and increase market share,'' Shibulal said.

Infosys has also benefited from the weakened rupee, which fell by more than 10 percent in 2013. It pays most of its employees in the Indian currency while collecting much of its contract revenue in dollars and euros. 

HIGHLIGHTS

* Q3 net profit 28.75 bln rupees vs estimate 27.15 bln rupees

* Raises FY revenue growth forecast as expected

* Net headcount drops 1,823 in Dec-quarter

* Shares rise as much as 3.6 pct

Infosys lifts outlook on improving outsourcing demand

(Reuters) - India's Infosys Ltd is chasing more big-ticket contracts from Europe and the United States this year and keeping a lid on costs as the outsourcing services giant powers ahead with a turnaround to regain market share.

India's second largest software services exporter raised on Friday its revenue growth outlook for the 2013/14 financial year to between 11.5 and 12 percent from a previously forecast 9-10 percent, citing higher demand for its services.

It reported its first decrease in its workforce in nearly five years, with overall attrition rates in the December quarter rising to 18.1 percent from 15.1 percent a year ago.

"While the organisation is going through transformation, there may be some minor disruptions," Chief Executive SD Shibulal told an analysts' briefing after announcing the company's earnings.

"But as you can see over the last two or three quarters as the transformation has happened we have continued to focus on our clients, we have continued to focus on growth, and continued to focus on margins improvement."

The departure of 1,823 staff in the December quarter, and several senior executives over the last six months, comes amid a strategic shift led by founder N.R. Narayana Murthy, who was brought back last year after a string of disappointing results.

Infosys did not say whether the employees had been laid off or had left voluntarily.

"I am not too worried about it. With every restructuring there are some people who have to go," said Juergen Maiar, a Vienna-based fund manager with Raiffeisen Euroasien Aktien, which owns Infosys shares.

"We are looking at improvement in utilisation with the reduction in staff numbers, which is good for investors."

Infosys shares rose as much as 3.6 percent after the company announced its quarterly earnings. The Mumbai stock market was trading 0.7 percent higher.

Infosys was once considered a bellwether of India's export-driven $108 billion IT outsourcing industry, but an inflexibility on prices, among other factors, resulted in it losing market share to rivals like Tata Consultancy Services Ltd , Wipro Ltd and Cognizant Technology Solutions Corp.

Infosys, which has been struggling to boost revenue from its own software platforms and high-margin consulting business, appeared to have some success in winning over large deals as the turnaround took hold.

It said the number of $100 million-plus revenue clients rose to 15 in the quarter up from 12 a year earlier.

Worldwide IT spending growth is expected to accelerate to more than 5 percent in 2014 after growing last year at its slowest pace since the financial crisis, according to the International Data Corporation.

Infosys, whose customers include Bank of America Corp and BT Group Plc, said net profit for the three months ended Dec. 31 was 28.75 billion rupees ($463 million), compared with 23.69 billion rupees a year earlier.

That compares with the average estimate of 27.15 billion rupees by 21 analysts, according to Thomson Reuters I/B/E/S.

Revenue rose 25 percent 130.3 billion rupees in the quarter. The company added 54 new clients during the quarter, taking the tally to 888.

Ads by Google

More from FE editor's picks

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...