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Infosys, the country’s second largest spoftware services exporter, will announce its fourth quarter earnings today, amid heitening uncertainty over H1-B visas, controversies over higer salary paid to top executives and also subdued outlook for the sector. [caption id=“attachment_3381938” align=“alignleft” width=“380”]  Reuters[/caption]An average of analysts estimates polled by CNBC-TV18 found that the company’s profit during January-March may have declined 3.7 percent to Rs 3,570 crore and revenue 0.2 percent to Rs 17,235 crore on a sequential basis. Dollar revenue is likely to witness a rise 1.3 percent to $2,584 million compared with a 1.4 percent fall in the previous quarter. Analysts see some forex tailwind of around 30 bps from cross currency fluctuations.
As it happened: Infosys Q4 net down 2.8% on qtr; sets aside Rs 13,000 cr for investors
Disappointing results in a difficult year
 "As it happened: Infosys Q4 net down 2.8% on qtr; sets aside Rs 13,000 cr for investors")
Rs 13,000 cr for investor pay back lower than TCS’ Rs 16,000 cr but good
Just how good is the company’s new dividend payout policy? Analysts say it is a good one.
“We view the revised dividend payout policy positively. Effective from Financial Year 2018, the Company expects to payout up to 70% of the free cash flow of the corresponding Financial Year either by way of dividend and/or share buyback. Apart from this, the company will pay an amount of roughly Rs.130bn ($2 billion) during Financial Year 2018 either by way of dividend and/or share buyback,“ Dipen Shah, senior vice president – PCG Research, Kotak Securities, said in a statement.
Earlier, Karan Taurani of Daulat Capital had told CNBC-TV18 that Rs 13,000 crore earmarked by the company for both dividend payout and share buyback was lower than Rs 16,000 crore set aside by its larger rival TCS.
Was Ravi Venkatesan’s appointment a move to address founders’ concerns?
Yes. At least that is the feeling of the shareholder advisory firms.
According to a report in The Economic Times, though the appointment, announced today, may not address all the concerns raised by NR Narayana Murthy, it indicates that the company management is listening to the founders.
“I am not sure this addresses all of Murthy’s concerns. He had asked for Marti Subrahmanyam to be brought to the board. But it shows the board is willing to listen,” Shriram Subramanian, managing director of shareholder advisory firm InGovern, told the newspaper.
Time for Vishal Sikka and Shah Rukh Khan to have a drink together?
In a wonderful comparison between Vishal Sikka and Shah Rukh Khan, Firstpost columnist Madhavan Narayanan says that despite the software major’s poor performance in the January-March quarter, the CEO can still be the King Khan and do a Raees to its investors.
“In both cases, we need to look at the idea of reinvention. And I might add: In both cases, the parties are smart, experienced and cash-rich. Time for Vishal Sikka to have a drink with SRK, perhaps?” he says in the article.
Read the entire article here .
Net profit down 2.8%, revenue 0.9% on quarter; key numbers in chart
The software exporter had a disappointing quarter with the net profit declining 2.8 percent on quarter and revenue 0.9 percent. The revenue growth guidance for the current financial year to too offered no repreive. In reaction, the stock was down more than 2 percent.
Check out the table below for the key numbers:
Pravin Rao says focus more on retaining high performers than bringing attrition down
COO Pravin Rao says attrition has come down to 13 percent and high performance attrition has come down dramatically to single digits.
“Our focus is on retaining high performers than on attrition,” he says.
We have a cohesive board, says Vishal Sikka
SIkka says Seshasayee and Ravi Venkatesan will as co-chairmen. “The job of 3 of us and management is to setting strategy and operations,” he said.
The company announced the appointment of Ravi Venkateshan as chairman today.
“We have a cohesive board and I have always appreciated the guidance, etc. It is our job to set strategies and execute it.
The framing of the strategy in a financial manner which is steep revenue growth to 20 million and increasing revenue per employee.
Sikka is of the opinion that despite headwinds, Infosys has have kept its margins.
$20 billion target for 2020 continues to be a moonshot, says Sikka
Sikka pointed out that Infosys was at the higher end of operating margin band.
For the fiscal year 2017, cash from operation crossed $2 billion.
“It continues to be a moonshot of achieving $20 billion target by 2020,” Sikka said.
Pravin Rao says industry transforming to cloud-based services
COO UB Pravin Rao said the company has seen double-digit growth in the financial services sector. Manufacturing was flat on constant currency basis and for the year in low single digits.
There are challenges in the high tech space, he said.
“The whole industry is transforming to cloud-based services and the focus is on cost-takeout and some amount of insourcing as well,” Pravin said.
We have to be problem finders; problem will be solved automatically, says Vishal Sikka
In the post earnings press conference, CEO Vishal Sikka pointed to more of automation, more of innovation fuelling growth going ahead.
“We have to become problem finders. Problem will be solved automatically,” he said at the press conference.
He said more and more of problem solving will be done through artificial intelligence.
He said the company is working closely with customers on most important strategic areas.
“It is a challenging environment out there in what is going on around the world around us. Q4 performance is an evolution for us,” he said.
Increasing commodotisation of many services, a strong need to bring automation, the geopolitical situation and visa issues are some of the challenges to focus on.
“Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance.. Looking ahead, it is imperative that we increase our resilience to the dynamics of our environment and we remain resolute in executing our strategy, our path to transform Infosys, and to drive long term value for all stakeholders,” Sikka had said in a statement earlier.
Rs 13,000 cr to be paid back to investors as dividend or buyback in FY18
The company will pay up to Rs 13,000 crore by way of dividend or share buyback in the current financial year.
“The company’s current policy is to pay dividends of up to 50 per cent of post-tax profits of the financial year. Effective from FY2018, Infosys expects to payout up to 70 per cent of the free cash flow,” the company said in its filing to the stock exchanges.
Andrew Holland says company no more a growth stock
Speaking to CNBC-TV18, analyst Andrew Holland has some cryptic observations on Infosys results.
He said the the company’s business model has broken down and the the stock is no more a growth stock. It has to be noted that the stock has been trading below Rs 1,000.
He also was of the vew that the reshaping of the strategy has not worked for the company yet.
He also was of the view that most companies have not been able to recover after demonetisaion.
EBIT margin guidance scaled down due to visa, forex concerns
The company has guided for an EBIT margin of 23-25% for the next financial year
Taurani pointed out that the margin guidance has been scaled down by 100 basis points from the earlier 24-26 percent. He attributed this to visa concerns and cross currency and rupee fluctuations.
Shares decline after disappointing numbers; analysts say guidance conservative
Infosys shares decline more than 2 percent after disappointing results
Analysts speaking on CNBC-TV18 said the results were disappointing with the cash usage being the only positive.
Karan Taurani, analyst at Daulat Capital Market, told the TV channel that the revenue guidance was bound to be conservative as the company had to cut the guidance three times last year.
Net profit Rs 3,603 cr; dollar revenue growth guidance at 6.5-8.5% disappoints
Infosys, the country’s second largest software services exporter, clocked a profit of Rs 3,603 crore during the fourth quarter of 2016-17, down 2.8 percent compared with Rs 3,708 crore in the previous quarter.
Revenue, meanwhile, declined 0.88 percent to Rs 17,120 crore from Rs 17,273 crore a quarter ago.
An average of analysts estimates polled by CNBC-TV18 had expected a profit of Rs 3,570 crore on a revenue of Rs 17,235 crore.
Dollar revenue came in at $2,569 million as against $2,551 million in previous quarter. Analysts had forecast this figure at $2,584 million.
The company guided for a dollar revenue growth of 6.5-8.5 percent in constant currency terms. This too was lower than analysts’ estimate of 7-9 percent.
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