Infosys Q2 result above analysts’ estimates, net profit up 13%

By: | Published: October 17, 2018 2:35 AM

The company reaffirmed its projection for 6-8% revenue growth in the current fiscal in constant currency and operating margin at 22-24%.

Infosys Q2 result above analysts’ estimates, net profit up 13%

On the back of investments in higher margin digital services, automation, and winning some big deals, the country’s second largest software services exporter Infosys on Tuesday reported its July-September quarter earnings above analysts’ estimates. The company’s net profit during the period was up 13% sequentially at Rs 4,110 crore, while consolidated revenue grew 7.7% quarter-on-quarter to Rs 20,609 crore, with digital business accounting for 31% of the total revenues.

The company reaffirmed its projection for 6-8% revenue growth in the current fiscal in constant currency and operating margin at 22-24%.

Infosys said it signed $2 billion worth of deals during the quarter.

“Large deal wins at over $2 billion during the quarter demonstrate our increased client relevance and also give us better growth visibility for the near-term,” CEO and managing director Salil Parekh said.

He said that the company was beginning to make progress on a three-year roadmap. Parekh has set out a three-year plan for Infosys — the first year in FY 2019 to stabilise, the second year to start to build momentum and the third year to start to accelerate.

“We see a strong demand outlook, we see good fundamentals in the US, we see strong macro in the continental European market,” Parekh said. “Our deal wins are strong in Q2, also strong in Q1. All in all our view is this is a fairly comfortable outlook in terms of demand and revenue growth for us,” he added.

In dollar terms, revenues were at $2,921 million, up 3.2% sequentially. Net profit was at $581 million, up 8.8% q-on-q.

“We have had another quarter of solid operating parameters with utilisation being stable and offshore mix improving to all-time high,” UB Pravin Rao, COO, said.

He said financial sector clients, accounting for over 30% of the company’s revenue, were once again beginning to spend on technology services due to higher interest rates in the US, the biggest market for India’s software services.

“We’re seeing spend come back in North America which was predominantly soft,” Rao said. “We’ve also seen growth coming back in many of the large accounts where in the last one or two quarters we had seen some softness,” he added.

Rao said that attrition remains on the higher side than the company’s expectations and it is working on “several interventions” including promotions, compensation and benefits, and creating new career streams.

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