Infosys cheers market with Rs3,465-cr Q3 net

Vishal Sikka, CEO and MD, InfosysInfosys, India's second-largest IT services company, has cheered markets with its sterling performance for the third successive quarter, pushing up the stock price by nearly 5 per cent to Rs1,128 a piece on the BSE on Thursday.

Infosys reported a consolidated net profit of Rs3,465 crore for the quarter ended 31 December 2015, up 2 per cent quarter-over-quarter and up 6.6 per cent year-on-year.

In dollar terms, the company's net profit grew 0.9 per cent to $524 million in the December quarter.

Revenues for the quarter ended 31 December 2015 were up 1.7 per cent over the previous quarter and up 15.3 per cent year-on-year at Rs15,902 crore.

In dollar terms, Infosys' revenue grew 0.6 per cent to $2.4 billion, compared to $2.3 billion in the September quarter.

It registered a 1.1-per cent growth in constant currency. Revenue had grown 4.5 per cent sequentially in the June quarter, and had surged 6 per cent in the September quarter. Such growth rates were last seen in 2012.

Operating profit for the quarter was up 0.9 per cent compared to the previous quarter and up 7.3 per cent year-on-year at Rs3,959 crore

Earnings per share (EPS) stood at Rs15.16 for the quarter ended 31 December 2015, a growth of 2 per cent over the previous quarter and a 6.6 per cent year-on-year growth.

At the end of December 2015, Infosys had liquid assets, including cash and cash equivalents, available-for-sale financial assets and government bonds worth Rs31,526 crore as of 31 December 2015 compared to Rs32,099 crore as on 30 September 2015.

"We are starting to see creative confidence blossoming within Infosys - David Kelley's beautiful idea that innovation is not specific to one department but is an ability within all of us, waiting to unleash our full creative potential. We are seeing Infoscions becoming innovators, bringing innovation and client value to each individual project. This confidence can only come from a culture of learning and empowerment, and this is the kind of company we are endeavoring to create," said Vishal Sikka, CEO and MD.

"Alongside grassroots innovation, we continue to see growing adoption of our Aikido services, bringing the power of intelligent systems, automation and software to amplify the skills and imaginations of our people. This combination helped us deliver encouraging results despite the traditional seasonality of the quarter and the additional headwinds, and will strengthen the execution of our strategy towards consistent profitable growth."

Infosys also raised its full-year revenue outlook to 12.8-13.2 per cent in constant currency, from 10 per cent to 12 per cent. In dollar terms, it has revised its guidance to 8.9-9.3 per cent.

Revenue guidance increased to 16.2-16.6 per cent in rupee terms based on the exchange rates as of 31 December 2015.

In the September quarter, this dollar guidance had been lowered to 6.4-8.4 per cent from 7.2-9.2 per cent previously.

The revision indicates acceleration in Infosys' IT business, and at this rate, it will overtake larger rival TCS that is struggling to set an 8 per cent growth target for the full 2015-16 fiscal.

The better-than-expected numbers were aided by adoption of newer technologies and innovative solutions despite the seasonality of the quarter marred by holidays and clients' employee leaves.

''The healthy volume growth this quarter has been encouraging. The lesser working days and our investments into additional trainees resulted in softer pricing and utilisation for the quarter.'' said U B Pravin Rao, president and COO.

''Our continued focus on employee engagement is paying dividends resulting in lower attrition. We continue to simplify our policies and enable greater agility within the company, with the goal of boosting our productivity.''

''We have been able to navigate the quarter better than our earlier expectations'', said MD Ranganath, CFO.

''We will continue to focus on enhancing operational efficiency through multiple levers in the coming quarters.''