Infosys Q4 net profit falls 28% sequentially to Rs 3,690 cr; buys digital creative WongDoody Holding for $75 mn

Software major Infosys Ltd, on Friday, reported a 28.1 percent sequential decline in consolidated net profit, in rupee terms, to Rs 3,690 crore for the fourth-quarter of fiscal 2017-18. In a regulatory filing to the BSE, the Bengaluru-based IT firm said consolidated revenue for the quarter under review was up 1.6 percent sequentially to Rs 18,083 crore in rupee terms. On a yearly basis, net profit, however, grew 2.4 percent and revenue 5.6 percent in rupee terms. Under the International Financial Reporting Standards, in dollar terms, consolidated net income declined 28.1 per cent sequentially to $571 million but gross income was up 1.8 per cent sequentially to $2,805 million. [caption id=“attachment_4299991” align=“alignleft” width=“380”] Infosys Jan-Mar quarter consolidated net profit grows 2.4% to Rs 3,690 cr; revenue up 5.6%. Reuters image.[/caption] On a yearly basis, net income, however, grew 5.3 percent and gross income grew 9.2 percent. M&A Infosys said it has decided to sell subsidiary Panaya, the Israeli firm whose acquisition became a contentious issue between the erstwhile management led by Vishal Sikka and the founders. The firm is also looking at selling its other subsidiaries Kallidus and Skava. Infosys said: “In the quarter ended March 31, 2018, on conclusion of a strategic review of its portfolio of businesses, the company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as ‘Skava’) and Panaya (collectively referred to as ‘disposal group’).” Furthermore, Infosys said it has entered into a definitive agreement to acquire WongDoody Holding Company Inc., a US-based digital creative and consumer insights agency, for a total consideration of up to $75 million. Infosys expects revenue for the 2018-19 fiscal to grow in the range of 6-8 percent in constant currency terms and 7-9 percent in US dollar terms. For the full fiscal year 2017-18, profit was up 11.7 percent at Rs 16,029 crore, while revenues grew three percent to Rs 70,522 crore over the previous year. “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,” Infosys CEO Salil Parekh said. He added that the company will execute its strategy around the four pillars – scaling digital business ($2.79 billion in revenue currently), energizing client’s core technology landscape via AI and automation, re-skilling employees, and expanding localisation in markets like US, Europe, and Australia. COO Pravin Rao said the company will be rolling out compensation increases for a large part of its workforce, effective 1 April. The Infosys Board in its meeting, on Friday, decided to retain the current policy of returning up to 70 percent of the free cash flow of the corresponding financial year. “In addition to the above, out of the cash on the Balance Sheet, the Board has identified an amount of up to Rs 13,000 crore to be paid to shareholders,” it added. This will be done through a special dividend of Rs 10 per share (resulting in a payout of about Rs 2,600 crore in June 2018). Also, an amount of up to Rs 10,400 crore has been identified to be paid out to shareholders for the Financial Year 2019 in a manner to be decided by the Board. The Board also appointed Kiran Mazumdar-Shaw, Independent Director, as the Lead Independent Director of the Board. (With inputs from agencies)