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

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

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.

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.

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.

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%

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.”

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.

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”.

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.”

Company back to its former strategy – Under promising and over-delivering

Operating margin has come in at 24.2 percent margin vs 23.6 percent estimate

Dollar revenue stands at $2,728 million, up 2.9 percent sequentially. This is against $2,738 million estiamted.

Analysts feel Infosys is back to its former strategy of under promising and over-delivering.

Net profit at Rs 3,726 beats estimates, revenue guidance cut to 5.5-6.5%

Infosys net profit at Rs 3,726 crore, higher than estimate.of Rs 3,496 crore

Revenue guidance for the current financial year has been cut to 5,5-6.5 percent from 6.5-8.5 percent earlier.

Shares down 1.38% as investors turn jittery; Sensex up 0.3%

Infosys shares closed down 1.38 percent at Rs 927 on the Bombay Stock Exchange today. The benchmark Sensex was up 0.3%.

Investors seem to have turned a little bit jittery ahead of the results announcement which is expected any time now.

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.

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.

Should we expect anything on internal forensic report on Panaya?

Should we expect anything on the contentious forensic report by Gibson Dunn & Crutcher?

Very unlikely.

One reason is the non-disparagement agreement signed between the Infosys management and Vishal Sikka. According to an earlier report by The Times of India, the pact does not allow both the management and Sikka to make any negative comments about each other.

However, it is also to be remembered that making the report public has been one of the key demands of NR Narayana Murthy.

The internal audit by Gibson, Dunn & Crutcher, a global consultancy firm, was instituted after Murthy raised the corporate governance issues in the company. Infosys has made only summary of the findings public.

Shareholder advisory firm is of the opinion that making the report public is key for Murthy. “SES is of the view that if the report is not made public in full, NRN (Murthy) will lose his credibility and prove that he was firing wrong shots ostensibly to hurt individuals he disliked and which undeniably caused irreparable damage to the baby he gave birth to,” an SES report said recently.