Infosys beats estimates but lowers revenues forecast for FY 20

By: and |
Updated: April 13, 2019 7:06:17 AM

The company lowered its revenue forecast for FY20 to 7.5%-9.5% in constant currency from 8.5%-9.0% in FY19.

The company’s revenues for the full year increase by 17.2% to Rs 82,675 crore but net profit saw a dip of 3.8% at Rs 15,410 crore.

India’s second-largest software services exporter, Infosys, on Friday posted its January-March quarter earnings, which were above analysts expectations, with a 0.6% sequential increase in revenues at Rs 21,539 crore.

However, the company lowered its revenue forecast for FY20 to 7.5%-9.5% in constant currency, from 8.5%-9.0% in FY19. Net profit during the period increased 12.6% sequentially to Rs 4,078 crore. Revenue in dollar terms rose 9.1% y-o-y to $3,060 million. Digital revenues at $1,035 million (33.8% of total revenues) grew 2.3% sequentially in constant currency terms.

The company’s revenues for the full year increase by 17.2% to Rs 82,675 crore but net profit saw a dip of 3.8% at Rs 15,410 crore. Operating margin during the January-March quarter declined 120 basis points on a sequential basis to 21.4%, the lowest in 11 quarters.

Also read | Infosys Q4 net profit jumps 13% on-quarter to Rs 4,078 crore; key figures in a nutshell

Infosys MD and chief executive Salil Parekh said that investments to “future proof” the company affected margins and raising sub-contractor costs due to shortage of talent onsite would not affect margins. Infosys also lowered its operating margin guidance for FY 20 in the range of 21%-23%. Operating profit during the quarter stood at Rs 4,618 crore, a 4.4% decline sequentially and a 3.3% growth year on year.

Infosys reported net profit of Rs 4,078 crore for the quarter against Rs 3,690 crore a year earlier. That compared with an average estimate of Rs 3,956 crore by 33 analysts, Refinitiv Eikon data showed.

Parekh said that India’s second-biggest software exporter expects its digital business to maintain high double-digit growth in the future.

Read | TCS Q4 results: Profit rises 17% on year to Rs 8,126 crore; key figures

“We are at a much more stable place (from where) we were 12 months ago,” he said. “We had given ourselves a three-year period to become fully functioning in terms of stability, momentum and acceleration.”

Infosys expects full-year revenue to rise by 7.5-9.5% on a constant currency basis, with an operating margin of 21-23%, the company said on Friday.

Indian tech companies gained prominence by giving Western clients low-cost solutions to problems such as the Y2K bug and then gradually helped to shape changes in international business as outsourcing expanded.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1CERC approves higher tariff for Adani Power’s 2 GW capacities at Mundra plant
2As Jet Airways issue deepens, PMO calls urgent meeting to discuss situation
3More PSU bank mergers in offing? RBI bats for further consolidation