Infosys reports 3.4% rise in Q2 net at Rs3,726 cr, lowers full year guidance
24 October 2017
Information technology major Infosys has reported a net profit of Rs3,726 crore for fiscal second quarter ended 30 September 2017- 18, showing a 3.4 per cent increase year-on-year and a 7 per cent increase over the previous quarter.
Infosys had reported a net profit of Rs3,483 crore for the April-June 2017-18 quarter, the company stated in a BSE filing. Infosys also lowered its FY18 growth guidance.
Second quarter revenues in rupee terms grew 1.5 per cent year-on-year and by 2.9 per cent sequentially. Operating margin for the quarter stood at 24.2 per cent against 24.1 per cent in the first quarter.
Revenues for the quarter grew sequentially by 2.9 per cent in dollar terms and by 2.2 per cent in constant currency terms.
Q2 net margins improved to 21.2 per cent, compared to 20.4 per cent in Q1 of FY18.
Basic EPS for the quarter stood at Rs16.30, showing a growth of 3.3 per cent year-on-year and a sequential growth of 7.0 per cent .
Fir fiscal first half ended 30 September 2017-18 the company's net profit stood at Rs7,209 crore, showing an year-on-year growth of 2.4 per cent.
Revenues for the six months were up 1.6 per cent year-on-year at Rs34,645 crore, while showing a growth of 5.5 per cent in constant currency terms.
Operating profit was almost flat at Rs8,357 crore for the half year ended 30 September 2017.
''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, minimising any negative impact to the business and allowing us to deliver growth across all our large industry units.''
''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 M D Ranganath, CFO. ''We have taken several steps during the quarter towards our capital allocation policy covering Rs13,000 crore share buyback, coupled with interim dividend of Rs13 per share for enhancing shareholder returns.''
For the full fiscal ending 31March 2018, the company expects consolidated revenues to grow 3-4 per cent in rupee terms and by 5.5-6.5 per cent in constant currency terms.
The board of Infosys, at its meeting on 19 August 2017, approved a proposal for the company to buy back its fully paid-up equity shares of face value of Rs5 each from the eligible equity shareholders of the company for an amount not exceeding Rs13,000 crore (approximately $2 billion).
The buyback offer comprises a purchase of up to 113,043,478 equity shares aggregating to 4.92 per cent of the paid-up equity share capital of the company at a price of Rs1,150 per equity share. The buyback is proposed to be made from all eligible equity shareholders, including those who become equity shareholders as on the record date by cancelling American Depository Shares and withdrawing underlying Equity shares, of the company as on the record date (ie, 1 November2017) on a proportionate basis through the "Tender offer" route.
The shareholders approved the buy-back proposal through the postal ballot concluded on 7 October 2017. The company has published a public announcement on 10 October 2017 for the buyback of its shares through a tender offer and has submitted the draft letter of offer to regulatory authorities for their comments.
Infosys said over the past eight weeks, the new management team and the committee of directors undertook a comprehensive strategy review exercise. With the objective of outlining a sharpened strategic direction, they reviewed all programmes across the organisation, accelerated execution plans and prioritized key areas of investments across the services and software portfolios.
''The exercise is a reassertion that our strategic direction will continue to be driven with a portfolio of market relevant design, consulting and technology services, enabled by software. The successful execution of this strategy positions us as the partner our clients can count on to accelerate their digital transformation journey,'' the company stated.