Infosys net up in rupees, down in dollars

Bengaluru: Global software major Infosys Ltd on Tuesday reported five percent net profit growth year-on-year (YoY) in rupee terms but a 1.3 percent YoY decline in dollar terms for April-June first quarter of fiscal 2015-16.

“We posted a net profit of Rs.3,030 crore and $476 million for the quarter under review as against Rs.2,886 crore and $482 million in same period year ago (2014-15),” the IT bellwether said in a statement here.

Support TwoCircles

Sequentially, net profit declined 2.1 percent in rupee terms too from Rs.3,097 crore and 4.5 percent in dollar terms from $498 million posted in last quarter (January-March) of last fiscal (FY 2015).

Revenue growth for the first quarter, however, remained positive in rupee and dollar terms, with 12.4 percent YoY increase to Rs.14,354 crore and 5.7 percent YoY to $2.3 billion under the International Financial Reporting Standard (IFRS).

Sequentially too, revenue growth was up 7 percent from Rs.13,411 crore and 4.5 percent up from $2.2 billion posted in previous quarter (Q4) of FY 2015.

“I am pleased with our performance in first quarter. Our efforts in redesigning clients’ experience and widespread adoption of innovation are starting to bear fruit in large deal wins and in the growth of large clients,” Infosys chief executive Vishal Sikka said in the statement.

Revenue growth sequentially at 7 percent in rupee and 4.5 percent in dollar is the highest in 15 quarter or nearly four years.

Similarly, sequential volume growth at 5.4 percent in rupee and dollar terms is also highest in last 19 quarters or nearly five years.

As an outsourcing major, the company earned 97.8 percent of revenue from overseas clients in dollars, euros and other currencies, with North America accounting for 63.2 percent, Europe 22.4 percent and rest of the world 12.2 percent, while India contributed a mere 2.2 percent.

“While we are still early in our journey to become the leading next-generation company, this (results) gives us a good momentum for the rest of the year,” Sikka asserted on the occasion.

The company, however, maintained its annual revenue guidance, or expected rise in income, at 10-12 percent for this financial year — or what it had projected in April. In dollar terms, though, the guidance has been revised upward by 100 basis points.

“We have retained revenue guidance at 10-12 percent year-in-year (YoY) in constant currency but increased it to 7.2-9.2 percent YoY in dollar terms from 6.2-8.2 percent YoY projected in April for FY 2016,” the IT bellwether said in a regulatory filing with stock exchanges on Tuesday.

The city-based outsourcing major reported consolidated revenue of Rs.53,319 crore for last fiscal (2014-15) in rupee terms and $8.7 billion in dollar terms, which was 6.4 percent growth YoY in rupee terms and 5.6 percent in dollar terms.

The IT outsourcing major had discontinued giving a quarterly revenue guidance in percentage and numbers since fiscal 2014.

The company has increased conversion rate for rest of the fiscal 2016 by $1.15 to Rs.63.65 per US dollar from $62.50 in April.

The company and its subsidiaries the world over added 79 clients during the quarter as against 52 in last quarter and 61 years ago, taking the total to 987 as against 950 quarter ago and 910 year ago.

“Revenue from our largest client cross $300 million, while we added two clients in $200-million bucket to four we had quarter ago and three year ago,” the statement added.

The company also signed six large deals in the quarter with total contract value (TCV) of $688 million (Rs.4,383 crore).

“We are operating within our started margin band, balancing strategic investments and client focus with operational efficiencies,” chief financial officer Rajiv Bansal said.

The company’s war chest (reserves, including cash), however, sequentially declined Rs.2,350 crore to Rs.30,235 crore in first quarter from Rs.32,585 crore quarter ago though up Rs.487 crore from Rs.29,748 crore in rupee terms.

In dollar terms too, reserves declined $464 million in first quarter to $4.75 billion from $5.21 billion quarter ago and $193 million from $4.94 billion a year ago.

“Pricing environment is competitive, which we are addressing through automation and improvement in productivity,” Bansal added.