Infosys Q3 net vaults over 38% to Rs5,129 cr on US tax gains

12 Jan 2018


Infosys, India's second-biggest software services provider by revenues, has reported a 38.3 per cent growth in its fiscal third quarter net profit even as it retained its full-year sales forecast, after growing revenues by 1 per cent for the three months ended 31 December.

Consolidated net profit for the three-month period ended 31 December 2017 was Rs5,129 crore, showing a growth of 38.3 per cent year-on-year and a 37.6 per cent growth sequentially.

The spurt in profit has been largely due to a $225 million (Rs1,432 crore) tax reversal in the US, the company's biggest market.

Revenues were at Rs17,794 crore for the quarter ended 31 December 2017 while operating profit stood at Rs4,319 crore for the quarter, showing a 0.4 per cent decline year-on-year and a 1.7 per cent growth sequentially.

Basic EPS stood at Rs22.55 for the quarter ended 31 December 2017

The Bengaluru-based software services company also signalled a pickup in the adoption of its digital solutions, joining larger rival Tata Consultancy Services in reporting this trend.

Revenue for the nine months ended 31 December 2017 stood at Rs52,439 crore, showing an year-on-year growth of 2.1 per cent in reported terms and 5.6 per cent growth in constant currency terms.

Operating profit declined 0.1 per cent to Rs12,676 crore for the nine months ended 31 December 2017.

During the nine months period ended 31 December 2017, on account of the conclusion of an APA with the US IRS, net profit has increased which has led to an increase in Basic EPS by Rs5.81, Infosys stated.

''It is a privilege for me to be appointed as the CEO and MD of Infosys, helping our clients navigate the digital future and employees build new skills and capabilities. Our Q3 performance is strong. We had 8% year-on-year growth and 24.3 per cent operating margin with $593 million of free cash flow.'' Said Salil Parekh, the newly-appointed CEO and MD.

''We are progressing towards stability and are well positioned to serve our clients in the new areas of demand'' he added.

''Increased adoption of our digital offerings and new services helped stabilize price realisation. We were able to grow client relationships across revenue categories.'' said Pravin Rao, COO. ''During the quarter, we provided compensation increases and higher variable payouts to our employees. Our investments in employees continues to deliver results as reflected in lower attrition.''

''Our operating margins were stable on the back of broad-based improvement in operational efficiency parameters. Our cash generation continued to be robust during the quarter.'' said MD Ranganath, CFO. ''We successfully executed the share buyback of Rs13,000 crore in line with our capital allocation policy.''

The company expects full-year revenue (consolidated) for the fiscal year ending 31 March 2018 to grow 5.5-6.5 per cent in constant currency; revenue is expected to grow 2.1-3.1 per cent in rupee terms based on the exchange rates as of 31 December 2017.

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