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Infosys Q3 profit net rises 7%
Infosys, India’s second-biggest software services firm, on Friday reported a better-than-expected seven per cent rise in the third quarter profit even as it slightly lowered the revenue guidance for the entire fiscal.
Hits $10-billion revenue mark; revises full-year revenue guidance
Bengaluru : Infosys, India’s second-biggest software services firm, on Friday reported a better-than-expected seven per cent rise in the third quarter profit even as it slightly lowered the revenue guidance for the entire fiscal. At Rs 3,708 crore, net profit for the October-December period was seven per cent higher than Rs 3,465 crore recorded in the corresponding quarter of the last fiscal. Sequentially, the profit was up 2.8 per cent.
Revenue in rupees declined 0.2 per cent to Rs 17,273 crore, while in dollar terms it slipped 1.4 per cent to $2.53 billion - the first fall seven quarters - due to RBS deal cancellation and seasonal weakness. Dollar revenue growth in constant currency was down 0.3 per cent quarter-on-quarter.
Infosys revised its full-year revenue guidance to 8.4-8.8 per cent from 8-9 per cent in constant currency terms. This translates into a revenue guidance to 7.2-7.6 per cent in dollar terms based on December 31 rates. This is the third time that the company has revised its revenue guidance.
“Taking into account seasonal and other additional headwinds for the quarter, our Q3 revenue performance was broadly in line with our expectations,” Infosys CEO and MD Vishal Sikka told reporters here. Sikka also said the company had achieved the feat of reaching the $10-billion mark in annual revenue run rate, describing it as an “emotional and psychological milestone”.
Sounding buoyant, Sikka said the company had performed well and is “optimistic” about the fourth quarter of the current fiscal. “Overall, I am happy with the performance in the first nine months of the year.” The company’s aspirational goal now was to reach $20-billion revenue by 2020, he said.
The company also announced appointment of S Ravikumar as Deputy Chief Operating Officer and in additional charge would oversee certain strategic business enabling functions from India. He will report to company COO U b Bravin Rao with immediate effect.
The cancellation of a major five-year 300 million pound RBS contract dealt a big blow to Infosys as it impacted as many as 3,000 Infosys employees and revenues for the year by about USD 40 million, Sikka said.
On the H1B visa issue, Sikka expressed hope that policies of the new Trump Administration would be friendly towards business, innovation and entrepreneurship. He also said there would be some impact of H1-B depending on the nature of the policy that is enacted but added that “it is not something he is overly concerned about”.
While Infosys crossed the $10-billion revenue mark in 2016, its aspirational goal of $20-billion revenue by 2020 still looks a little distant. Sikka, however, said: “The $10-billion mark is a huge emotional, psychological milestone for us. And yes of course, our aspiration continues to be $20 billion, 30 per cent margin and $80,000 Rev per employee and that is something that we are absolutely working hard towards.” Asked if the goal was achievable, he quipped: “What good is an aspirational goal if it is not aspirational”.
