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Infosys Q1 net rises 5% to Rs 3030 cr; Vishal Sikka says efforts paying off

Infosys Ltd, India's second-largest software services exporter, reported a 5 percent increase in quarterly net profit, bolstered by a surge in demand for IT outsourcing services from clients in the United States, its biggest market. Shares of the company zoomed 9 percent reacting to the results.

Infosys, which provides IT services to clients like Apple Inc, Volkswagen AG and Wal-mart Stores Inc, posted Rs 3,030 crore ($475.85 million) in profit in the June quarter, up from Rs 2,886 crore a year ago.

 Infosys Q1 net rises 5% to Rs 3030 cr; Vishal Sikka says efforts paying off

Vishal Sikka. Reuters

Analysts, on average, were expecting it to post 30.20 billion rupees in net profit, according to Thomson Reuters data.

Consolidated revenue for the quarter was up 12.4 percent to Rs 14,354 crore, from Rs 12,770 crore in April-June, 2014.

For whole 2015-16, the country's second-largest software services firm expects revenue to grow 7.2-9.2 percent in dollar terms, and 11.5-13.5 percent in rupee terms. Industry body Nasscom expects the Indian IT-BPM sector to grow 14-16 per cent in dollar terms for the fiscal.

"Our efforts in redesigning our clients' experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients," Infosys CEO and Managing Director Vishal Sikka said.

While Infosys is still early in its journey to become the leading next-generation services company, this gives a good momentum for the rest of the year, he added.

In US dollar terms, its consolidated net profit declined 1.3 percent to $476 million in the first quarter of 2015-16, while revenue rose 5.7 per cent to $2.25 billion.

"We are operating within our stated margin band, balancing strategic investments and client focus with operational efficiencies," Infosys CFO Rajiv Bansal said.

Pricing environment is competitive, which Infosys is addressing through automation and improvement in productivity, he added.

The company added 79 clients in the said quarter, signed six large deals with a total contract value of $688 million. Its volume growth stood at 5.4 per cent.

The company added 3,336 employees, taking its headcount to 1,79,523 employees as on June 30, 2015. Its attrition rate was at 14.2 percent for the said quarter.

Liquid assets, including cash and cash equivalents, available-for-sale financial assets and government bonds, were Rs 30,235 crore in the quarter under review compared to Rs 32,585 crore as on March 31, 2015.

At 09:53 am, shares of Infosys were trading 6.65 percent up at Rs 1,068.50 apiece on the BSE in early trade.

Brokerage Prabhudas Lilladher termed the results were strong beat to expectation.

The company's earnings per share of Rs 13.26, a de‐growth of 2.2% QoQ, beating the expectations, said the brokerage.

The brokerage said the companny has recorded strong growth in North America. Segment-wise, application management, infrastructure managment services (IMS) and consulting also witnessed good growth.

Revenue for North America, Europe and Rest of the World grew by 5.1%, 1.2% and 9.7% quarter on quarter, respectively. In terms of verticals financial services and insurance and maunfacturing grew strongly 2.8% and 5.4% on quarter. In terms of service lines, consulting grew a strong 4.8% on quarter and IMS 7.1%.

With inputs from agencies

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Updated Date: Jul 21, 2015 10:23:08 IST