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Infosys lowers revenue outlook despite robust growth in Q2 (Second Lead) (With Image)

Bengaluru, Oct 24 (IANS) Beating analysts’ estimates and despite posting robust quarterly and yearly growth in the second quarter (Q2), global software major Infosys Ltd on Tuesday projected lower annual revenue guidance for fiscal 2017-18 in dollar and rupee terms.

Consolidated revenue for the fiscal year ending March 31, 2018 is expected to grow 6.5-7.5 per cent in dollar terms and 3-4 per cent in rupee terms as on September 30 exchange rate of $1 equals Rs 65.29, the company said in a statement here.

The company posted consolidated revenue of $10.2 billion or Rs 68,484 crore for fiscal 2016-17.

The revised outlook for FY 2018 is less than 7.1-9.1 per cent growth in dollar and 3-5 per cent in rupee projected on July 14 and 6.1-8.1 per cent in dollar and 2.5-4.5 per cent in rupee estimated in April.

The US dollar was Rs 64.58 on June 30 and Rs 64.85 on March 31, 2017.

In constant currency, revenue is projected to grow 5.5-6.5 per cent.

“Operating margin guidance for the fiscal is unchanged at 23-25 per cent,” the statement said.

Earlier, the company reported Rs 3,726 crore net profit for the quarter under review (Q2), registering 3.4 per cent yearly and 7 per cent quarterly growth in rupees.

In dollars, net income at $578 million is up 7.3 per cent yearly and 7 per cent quarterly.

Consolidated revenue at Rs 17,567 crore is up 1.5 per cent yearly and 2.9 per cent quarterly.

Under the International Financial Reporting Standard (IFRS), gross income at $2,728 million is up 5.4 per cent yearly and 2.9 per cent quarterly.

Operating profit at $659 million grew 2.4 per cent yearly and 3.4 per cent quarterly under IFRS, while it declined 1.4 per cent yearly but grew 3.3 per cent quarterly to Rs.4,246 crore under the Indian Accounting Standard.

Operating margin was 24.2 per cent compared to 24.1 per cent quarter ago, while net margin improved to 21.2 per cent in Q2 from 20.4 per cent in Q1.

The blue chip company declared in interim dividend of Rs 13 per share (270 per cent) of Rs 5 face value as against Rs 11 per share (220 per cent) a year ago.

Though the quarterly results were declared after the stock markets closed trading for the day, the company’s blue chip scrip of Rs 5 face value ended at Rs 926.75 per share, which is Rs 12.90 lower than on Monday’s closing rate of Rs 930.75 and opening price of Rs 945.

The share went up to a high Rs 947.50 and hit a low of Rs 924 during the intra-day trading sessions.

“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, in the statement.

Chief Financial Officer M.D. Ranganath said focus on improving operational efficiencies enabled the company to deliver stable margins and provide compensation increases and higher variable pay-outs to the employees.

“During the quarter, we responded to the management and Board changes through proactive communication with all stakeholders minimizing negative impact on the business and allowing growth across large industry units,” said Rao.

Revenue from new services grew 14 per cent sequentially and constituted 9.4 per cent of the overall revenue. They also contributed over 50 per cent of incremental revenue along with software.

“We have seen good progress on large deal wins, with TCV (total contract value) of $731 million from 5 of them in the quarter,” added Rao.

Cash reserves and investments were at Rs 41,392 crore ($6.3 billion).

“Our free cash flow increased 19 per cent year-on-year in the first six months (April-September), which is the highest ever in the balance sheet,” claimed Ranganath.

The company and its subsidiaries added 72 new clients in Q2 as against 59 quarter ago and 78 year ago, taking their total to 1,173 as against 1,164 quarter ago and 1,136 year ago.

–IANS
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