Infosys Q1 profit down 3.3% at Rs 3,483 cr, lifts dollar revenue growth guidance

Infosys Ltd, India’s second-biggest software services exporter, reported a 1.4 percent increase in first-quarter profit on Friday, slightly beating street estimates, helped by key client wins. Bengaluru-headquartered Infosys posted a consolidated net profit of Rs 3,483 crore ($540 million) for the three months ending 30 June compared with Rs 3,436 crore in the same quarter last year. This is, however, 3.3 percent lower than Rs 3,603 crore reported in the previous quarter. Consolidated revenue from operations rose about 1.8 percent to Rs 17,078 crore. [caption id=“attachment_3811831” align=“alignleft” width=“380”]  Reuters[/caption] Analysts had, on average, estimated a consolidated net profit of Rs 3,439 crore for the quarter ending June, according to Thomson Reuters data. The company said it added eight clients in its $100 million category. The company has kept its guidance for constant currency revenue growth at 6.5-8.5 percent and that for operating margin guidance at 23-25 percent for 2017-18. However, the dollar revenue guidance has been raised to 7.1-9.1 percent from 6.1-8.1 percent earlier. “Our persistent focus on execution in Q1 is reflected in broad-based performance on multiple fronts revenue growth, resilient margins despite multiple headwinds, healthy cash generation and overall business results,” Vishal Sikka, CEO & MD said in a press release. He said he was encouraged by the uptick in revenue per employee for six quarters in a row. “The widespread adoption of our grassroots innovation and education initiatives continue to fuel our transformation, and I am proud to see Infoscions embrace and drive Infosys toward becoming a next generation services company,” he said. According to COO UB Pravin Rao, the company had broad-based growth across geographical and industry segments. “Our initiatives on operational discipline led to record levels of utilization and better realization during the quarter. Our new services and software offerings are helping us strengthen our positioning in the market,” she said. CFO MD Ranganath, meanwhile, said the company has been successful in navigating yet another quarter of significant currency volatility through our hedging.” Infosys’ bigger rival TCS had on Thursday reported 6 percent on year fall in net profit for the first quarter which has been attributed to currency volatility. Brokerage house Emkay global in note said Infosys’s operating performance was ahead of estimates but sustenance of pricing is critical to support profitability. “We believe that though the numbers are better than expected on reported basis we do not see any major positives on annual basis as there has been no uptick on cc (constant currency) guidance despite better performance which indicates that the pricing gains are not sustainable and profitability would see downtick in coming quarter on lower sequential growth, wage hikes (effective July’17) and INR appreciation,” the brokerage said. With Reuters inputs