Infosys beats expectation in Q2 with Rs 3,398 crore net; Rajiv Bansal resigns as CFO

Infosys, India’s second largest software exporter, reported a better-than-expected earnings for July-September quarter, but also announced that its CFO Rajiv Bansal has stepped down, resulting in huge volatility in the company’s shares on the stock bourses.

The company’s net profit during the quarter stood at Rs 3,398 crore, up 12 percent from Rs 3,030 crore posted in the previous quarter, while consolidated revenue was Rs 15,635 crore, up 8.9 percent.

Dollar revenue increased 6 percent to $2,392 million from $2,256 million. A CNBC-TV18 poll had seen the company’s profit at Rs 3,244 crore, revenue at Rs 15,210 crore and dollar revenue growth at 3.6 percent.

In June quarter, Infosys had raised dollar revenue guidance for FY16 to 7.2-9.2 percent from 6.2-8.2 percent. Analysts had expected the company to maintain its FY16 guidance of 10-12 percent in constant currency.

Reacting to the earnings, Infosys shares initially surged 4.4 percent to touch a high of Rs 1,219, but soon shed all its gains to tumble to a low of Rs 1,108.90, down 5 percent.

“While results in any one quarter are transitory snapshots of a long journey, we do see our focused execution along our strategy starting to produce encouraging results for our clients, shareholders and Infoscions,” said Vishal Sikka, CEO and MD.

He said the endeavour is to make Infosys a services organisation that can truly partner with and amplify businesses. “I am encouraged by our progress,” he said.

“We had strong all-round growth during the quarter driven by recent initiatives around service differentiation, improvement in client mining and higher focus on winning large deals,” said U B Pravin Rao, COO.

“Increase in revenue productivity was significant, volume growth was robust, client metrics and utilization improved while attrition remained stable,” he said.

“Our relentless focus on operational efficiencies has resulted in increase in operating margins despite higher variable payouts,” said Rajiv Bansal, CFO.

“The impact of significant currency volatility was effectively mitigated by our proactive hedging program,” he said.

Other highlights of the results:

* Liquid assets as of September 30 stand at Rs 32,099 crore, up from Rs 30,225 crore a quarter ago.

* Per capita revenue increased 2.6% in reported terms and 3.4% in constant currency terms

* 5 large deals signed during the quarter with total contract value of $983 mn

* Added 82 clients; total number of clients crosses 1,000

* Revenues are expected to grow 10-12% in constant currency

* Revenues expected to grow 13.1-15.1% in rupee terms

* Attrition inched up to 19.9% from 19.2% a quarter ago.