Re-skilling Infosys’ staff is Salil Parekh’s mantra for FY19: 4 key takeaways other than earnings

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Published: April 13, 2018 7:32:30 PM

In its first quarter after CEO Salil Parekh took over the reins from Vishal Sikka, IT behemoth Infosys reported Q4 results largely in line with street estimates. The CEO has suggested re-skilling of Infosys' employees to be his top priority in FY19.

Infosys, Infosys shares, Paris, Euronext london, euronext paris‘Navigating Your Next’ is our aspiration of how we will partner with each one of our clients,” Salil Parekh said. (Image: Reuters)

In its first quarter after CEO Salil Parekh took over the reins from Vishal Sikka, IT behemoth Infosys reported Q4 results largely in line with street estimates. The CEO has suggested re-skilling of Infosys’ employees to be his top priority in the new fiscal year. The company has reported a 2.4% rise in net profit to Rs 3,690 crore. Interestingly, the company has said that FY 19 revenue guidance in constant currency at 6%-8% and guided FY 19 operating margin range at 22%- 24%. Taking stock of the reported results, Infosys CFO M.D. Ranganath said, “Our operating margins during the quarter and fiscal 2018 were resilient due to unwavering focus on productivity and operational efficiency, leading to a robust cash generation.” Rangnath also pointed out that the company implemented the capital allocation policy including the successful closure of $2 billion share buyback program in December 2017 and healthy increase in Dividend Per Share for the year. We bring to you five key takeaways other than earnings.

Fall in gross client additions

The company’s gross client additions came in at 73 in the March quarter, as compared to 79 in the previous quarter. Notably, the resignation of Vishal Sikka had raised concerns regarding the future direction of Infosys’ clients. The company has a total of 1,204 clients as on March-18.

Attrition rises marginally

In the quarter under review, annualized standalone employee attrition reduced marginally to 16.6% compared to quarter annualised standalone employee attrition of 15.8% percent in the previous quarter. Notably, the company has also reported a rise in consolidated annualised attrition to 19.5% in the quarter from 18.7% in the previous quarter. “Revenue productivity per employee was stable during the year as the benefits of automation and newer services kicked in. Employee utilization remained healthy.” Infosys COO Pravin Rao said.

Management strategy

“We will execute our strategy around the four pillars of Scaling our Agile Digital business which is today US$2.79 billion in revenue, Energizing our client’s Core technology landscape via AI and automation, Re-skilling our employees, and Expanding our localization in markets such as US, Europe, and Australia,” CEO Salil Parekh observed. 

Infosys CEO Salil Parekh take

“I am pleased with our healthy revenue growth, profitability, and cash generation in Q4. Our robust performance is a reflection of the strong impact we have with our clients and the dedication of our employees. ‘Navigating Your Next’ is our aspiration of how we will partner with each one of our clients,” Salil Parekh said.

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