Infosys posts robust growth in second quarter

Bangalore: Beating market estimates, IT bellwether Infosys Ltd Friday reported robust net profit and revenue growth in rupee and dollar terms for the second quarter (July-Sep) of this fiscal (2014-15).

Net profit for the quarter (Q2) under review increased to Rs.3,096 crore, posting growth of 28.6 percent year-on-year (YoY) from Rs.2,407 crore year ago and 7.3 percent sequentially from Rs.2,886 crore in first quarter (April-June) of this fiscal.

Consolidated revenue, however, increased to Rs.13,342 crore, registering marginal growth of 2.9 percent YoY from Rs.12,965 crore year ago but 4.5 percent sequentially from Rs.12,770 crore in first quarter of this fiscal.

Under the International Financial Reporting Standard (IFRS), net income grew 33 percent YoY and six percent sequentially to $511million and gross revenue 6.5 percent YoY and 3.9 percent sequentially to $2.2 billion for the quarter.

The global software major, however, maintained its annual revenue guidance for this fiscal (2014-15) at seven-nine percent in dollar terms and 6.7-8.7 percent in rupee terms, as given in April at the beginning of this fiscal.

"Consolidated revenue is expected to growth 7-9 percent in dollar terms under the IFRS and 6.7-8.7 percent in rupee terms for the fiscal (FY 2015)," the company said in a statement here.

The global software major has discontinued giving quarterly guidance since a year.

The company declared a 1:1 bonus issue of equity shares to increase liquidity of its blue-chip scrip and expand the retail shareholder base on the bourses.

"We are giving bonus shares at 1:1 after 15 years to our investors in India and 1:1 stock dividend of American Depositary Shares (ADS) to our overseas investors to increase liquidity and the retail shareholder base," Infosys chief financial officer Rajiv Bansal told IANS here.

The company also declared an interim dividend of Rs.30 per share for the first half (April-Sep) of this fiscal, which is six times (600 percent) the par value of its Rs.5 per share.

As a result, the blue chip's share price shot up 6.16 percent to Rs.3,870 on the BSE within an hour of trading commencing Friday from opening rate of Rs.3,685 and Thursday's closing rate of Rs.3,645.55.

"We have also been able to improve our margins by 100 basis points (one percent) to 26.1 percent during the quarter and feel confident of sustaining these within a narrow band," Bansal asserted.

The company and its subsidiaries the world over added 49 clients during the quarter, increasing the total number of active clients to 912 from 910 a quarter ago and 873 year ago.

"Digital transformation is reshaping the business of every one of our clients. We see this as a great opportunity to help them renew the core of their business as well as to expand into new frontiers and are seeing early positive results," Infosys chief executive Vishal Sikka said in the statement.

Sikka is the first non-founder chief executive who assumed charge Aug 1.

"Our strategy is to apply the same principles to our business in order to capture this opportunity and accelerate our growth, within our culture of lifelong learning and purposeful work," Sikka added.

The company added (gross) 14,255 employees during the quarter, taking the total number of headcount to 165,411 till Sep 30 from 161,284 quarter ago and 160,227 year ago.

With 10,128 employees exiting the company in the quarter, net addition was only 4,127. As a result, attrition went up to 20.1 percent from 19.5 percent quarter ago and 17.3 percent year ago.

"On several fronts, our efforts to bring in operational efficiencies yielded encouraging results during the quarter," Infosys chief operating officer U.B. Pravin Rao said in the statement.