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Infosys results LIVE: Net profit Rs 3,726 cr, up 7% on quarter; revenue at Rs 17,567 cr, up 2.9%

All eyes are on Infosys as the company announces its first earnings after Nandan Nilekani's return

FP Staff October 24, 2017 16:35:24 IST
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Infosys results LIVE: Net profit Rs 3,726 cr, up 7% on quarter; revenue at Rs 17,567 cr, up 2.9%

Highlights

15:29 (ist)

Will the management announce the new CEO today?


According to a
report in the Business Standard, Infosys is likely to announce the new CEO today. 


Nandan Nilekani was brought in to find a new head for the company. 


According to the report the probable canadidates are BG Srinivas and Ashok Vemuri, both former Infosys executives.


Both of them had quit after Sikka assumed the office.


According to the BS report, the current interim MD and CEO UB Pravin Rao will fo back to his earlier role as chief operating officer.

LIVE NEWS and UPDATES

Oct 24, 2017 - 16:48 (IST)

Next few quarters critical, will need delicate handling, says analyst


Sanchit Vir Gogia, chief analyst, founder and CEO, Greyhound Knowledge Group, a strategy and transformation research, advisory and consulting group, says: The next few quarters will be extremely critical for the company and will require delicate handling to say the least.

"The new management has to go out of their way and keep focus on what matters - client outcomes, employee happiness and investor returns," Gogia said.

"Long term, the dangers of being irrelevant also loom high - the fact is that Vishal Sikka was instrumental in bringing through the much needed change in culture and strategy. With his departure, Infosys has to go the extra mile to communicate and convince their stakeholders of their focus on being relevant in the future."


(Input from Sulekha Nair)

Oct 24, 2017 - 16:34 (IST)

Net profit Rs 3,726 cr, up 7% on quarter; revenue at Rs 17,567 crore, up 2.9%

Net profit at Rs 3,726 crores; QoQ growth of 7.0% and YoY growth of 3.4%


Revenue at Rs. 17,567 crores; QoQ growth of 2.9% and YoY growth of 1.5%


72 new clients added in Q2FY18; client count: 1173


Volume growth was 1.6%; blended pricing increased by 1.3% in reported terms


Employeee utilisation including trainees at 84.7%; utilisation excluding trainees at 81.8%


198,440 employees, as on Sep 30, 2017, gross addition of 10,514  employees in Q2FY18

Oct 24, 2017 - 16:25 (IST)

Overall confidence among clients remains, says Pravin Rao


According to Rao, from a sector perspective, barring retail, Infosys has seen good performace across all others during the second quarter. 


Lower number of working days during this quarter and seasonal softness have impacted the earnings. 


"End of year there are few account specific softness. However, overall confidence from client remains," Rao said.

Oct 24, 2017 - 16:21 (IST)

Net-net good progress during the quarter, says Pravin Rao 

According to Pravin Rao, revenue per employee stood at $52,700, consecutive seventh quarter of rise. The company's volumes grew 1.7 percent during the quarter.


Revenue from new services grew 14 percent quarter on quarter. Clients continued adoption of software platforms. "Net-net good progress," Rao said.

Oct 24, 2017 - 16:16 (IST)

Nandan Nilekani on investigations into alleged wrong doing

According to the press release by the company the Board has reaffirmed the previous findings of external investigations that there is no merit to the allegations of wrongdoing.


“I believe that all stakeholders acted out of a strong passion for Infosys, wanting what they believed to be the best for the Company and to see it succeed. In light of my review of these matters, I am fully persuaded, as is the entire Board, that the conclusions of the independent investigations are correct. This Board and I are committed to the highest standards of professionalism and will deal promptly and decisively with any governance issues should they ever come up in the future,” Nilekani said.

Oct 24, 2017 - 16:12 (IST)

Dollar revenue $2,728 mn, up 2.9% on quarter; operating profit $659 mn, up 3.4%


Revenues were $2,728 million for the quarter ended 30 September 2017 on quarter growth of 2.9% in reported terms; 2.2% in constant currency terms YoY growth of 5.4% in reported terms; 4.6% in constant currency terms

Operating profit was $659 million for the quarter ended September 30, 2017 QoQ growth of 3.4%; YoY growth of 2.4%

Net profit was $578 million for the quarter ended September 30, 2017 QoQ growth of 7.0%; YoY growth of 7.3%

Revenues were $5,379 million for the half year ended September 30, 2017 YoY growth of 5.7% in reported terms; 5.5% in constant currency terms


Operating profit was $1,298 million for the half year ended September 30, 2017 YoY growth of 4.1%


Net profit was $ 1,119 million for the half year ended September 30, 2017 YoY growth of 6.6%

Oct 24, 2017 - 16:04 (IST)

Focus on efficiency helped deliver stable margins: MD Ranganath

“Our focus on improving operational efficiencies enabled us to deliver stable margins in the quarter and at the same time provide compensation increases and higher variable payouts to our employees.” said MD Ranganath, CFO.


“We have taken several steps during the quarter towards our capital allocation policy covering `13,000 crore share buyback, coupled with interim dividend of `13 per share for enhancing shareholder returns.”

Oct 24, 2017 - 16:00 (IST)
Guidance cut a big negative for company and IT sector, say analysts
 
 
According to expert Moshe Katri from New York, the focus will be on what the company does as regards digital adn product businesses.
 
 

"We will be focussing on plans for digital and product business," Katri told CNBC-TV18.

According to him, the fact that tthe company has brought down guidance is probably going to be a big negative for it and for the sector as well.

Oct 24, 2017 - 15:56 (IST)

Nandan Nilekani on foresnic report: fair and independent investigation 

Nandan Nilekani says in a statement, "I am fully persuaded and the entire board that it was a fair and independent investigation and all stakeholders acted in a fair transparent manner but it could have been handled better".

Oct 24, 2017 - 15:54 (IST)

Reponse to board changes was quick, says UB Pravin Rao

"We continue to focus on executing on the theme of software enabled services and on accelerating growth of our new services portfolio.” said U B Pravin Rao, Interim CEO and Managing Director.

“During the quarter, we responded quickly to the management and Board changes through proactive communication with all stakeholders minimizing any negative impact to the business and allowing us to deliver growth across all our large industry units.”

All eyes are on Infosys earnings this time round. For one the reason is that this is the first earnings after the return on Nandan Nilekani to the helm.

Analysts expect the outcome of the board meeting to reflect on long-term stability in the business along with short-term confidence building measures like date for share buyback and employees' salary hike.

Infosys results LIVE Net profit Rs 3726 cr up 7 on quarter revenue at Rs 17567 cr up 29

Reuters

An average of analysts' poll by CNBC-TV18 has seen profit flat at Rs 3,496 crore against Rs 3,483 crore in the previous quarter. Revenue is seen increasing 3.2 percent sequentially to Rs 17,630 crore and dollar revenue 3.3 percent to $2,738 million.

Constant currency revenue growth is expected to be at 2.2 percent for the quarter against 2.7 percent in Q1. Earnings before interest and tax (EBIT) is seen falling to Rs 4,097 crore during the quarter, compared with Rs 4,111 crore in the previous quarter. Operating margin, meanwhile, is seen declining 50 basis points to 23.6 percent sequentially due to wage hikes.

However, analysts will also closely watching the management commentary. "The Infosys board has two key issues to manage currently -- one, ensuring stability by way of managing stakeholder sentiment and two, offering visibility by way of sharing concrete guidance," Greyhound Knowledge Group CEO and Chief Analyst Sanchit Vir Gogia told PTI.

He further said while multiple short-term tactics like share buyback, employees salary hikes and active client conversations can be expected to ensure stability, it is the concrete guidance that needs most focus and work.

Infosys has been in the news since the beginning of 2017 due to sharp differences between its founder NR Narayana Murthy and the company's board under R Seshasayee as Chairman and Vishal Sikka as CEO over governance issues.

Murthy had also expressed concern over Rs 1,250 crore acquisition of Israel based IT firm Panaya based on anonymous letter, which alleged wrong doing in the deal. An audit done by international law firm Gibson Dunn and Control Risks found no evidence of wrongdoing in the Panaya acquisition.

Sikka resigned from the company on 18 August after a series of allegations levelled by Murthy. Seshasayee and Infosys co-chairman Ravi Venkatesan resigned in the following week.

Nilekani returned to the board of the company after a gap of about seven years as non-executive chairman on 24 August. His appointment seems to have settled the dust of controversies around board, however, stakeholders are now looking for uptake of the company's business under Nilekani's regime.

Infosys Chief Operation Officer UB Pravin Rao was given interim charge of managing director and CEO on 24 August. The announcement of regular CEO is due from the company.

The company had posted 1.3 percent increase in net profit to Rs 3,483 crore for the June quarter, helped by client wins in key markets, and raised its annual US dollar revenue outlook.

Its revenue grew 1.7 percent to Rs 17,078 crore in the first quarter of 2017-18 as against Rs 16,782 crore in the year-ago period.

(With inputs from PTI)

Updated Date:

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