Infosys net profit rises 13.4% to Rs 3,436 cr; stock plummets over 8%
15 July 2016
Infosys Ltd has posted a net profit of Rs 3,436 crore for the quarter ended 30 June 2016 a 13.4 per cent increase compared with Rs3,028 crore for the quarter ended 30 June 2015.
Net profit, however, was down 4.47 per cent compared with the Rs3,597-cr profit posted in the previous quarter (January-March 2015-16), which caused a fall in its share prices.
The company shares plunged 8.07 per cent at Rs1,080.90 in the late morning trade on the BSE.
Revenue for the fiscal first quarter stood at Rs17,535 crore, showing a 16 per cent year-on-year increase and a 1.2 per cent increase compared with the January-March FY17 quarter.
On a standalone basis, the company posted a net profit of Rs3,180 crore for the quarter ended 30 June 2016 compared with Rs2,891 crore for the quarter ended 30 June 2015.
Total income during the April-June 2016-17 quarter increased to Rs 15,181 crore from Rs13,459 crore during the quarter ended 30 June 2015.
Infosys also announced the grant of 1,857,820 RSUs (restricted stock units) to a total of 7,898 eligible and identified high performing employees up to mid-level managers of the company and its subsidiaries under the 2015 Employee Stock Compensation Plan.
The Nomination and Remuneration Committee of the board of directors of Infosys Limited, at its meeting held on Thursday, approved the grant the RSUs at par value, to be made on 1 August 2016.
The RSUs will vest over a period of four years from the date of grant, which shall be exercisable within the period as approved by the committee. Out of these RSUs, a total of 1,515,135 equity shares will be issued out of the existing treasury shares held by the Infosys Employee Benefits Trust and the balance will be in the form of ADR's and Phantom stock rights.
In accordance with the postal ballot approved by the shareholders on March 31, 2016, Vishal Sikka, CEO and managing director, has been granted RSUs amounting to $2 million which shall be made on 1 August 2016. The RSUs are time based and will vest over a period of 4 years subject to continuous service. The exercise price for the grant is equal to the par value of one share per RSU.
''We had unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals that we had won in earlier quarters, resulting in a lower than expected growth in Q1,'' said Vishal Sikka, CEO. ''Despite this, I am very encouraged by our progress in the execution of our strategy. We launched Infosys MANA, our AI-based approach to helping clients continuously renovate their business processes and have already delivered on first client successes. We continued to see strong momentum in large deal wins in which we are bringing the best of our Renew-New strategy to every deal; and we continued to see growth in our delivery services due to their renewal on the basis of Zero Distance, Design Thinking and automation.
''Going forward, we will continue our strong focus on our long-term goals and vision of transforming Infosys where open, intelligent technology amplifies people and frees them to innovate in a culture of learning and collaboration, while bringing operational excellence and cost discipline to every aspect of our business.''
Sakia said during the quarter Infosys saw strong growth in major clients.
''Automation continues to be a core lever in the renewal of our traditional service offerings.'' said U B Pravin Rao, COO. ''We are making impactful internal process changes through our simplification initiatives with a focus on better employee experience and improved productivity.'', he added.
''Our focus on optimizing cost efficiency levers helped us during the quarter and our cash generation was strong,'' said MD Ranganath, CFO. ''We navigated a volatile currency environment effectively.''
The company' expects revenues (consolidated) for the fiscal year ending 31 March 2017 to grow 10.5 per cent to 12.0 per cent in constant currency terms, which translates to 11.7 per cent to 13.2 per cent in rupee terms based on 31 March rates and 13.7 per cent to 15.2 per cent based on 30 June rates.