Infosys ups revenue guidance on strong growth, dollar

Bengaluru, Jan 14: Riding on strong growth in a weak quarter and on an appreciating US dollar, software major Infosys Ltd. on Thursday revised its revenue guidance upwards for this fiscal (2015-16) for the second time.

“Our consolidated revenue guidance has been increased in rupee terms to 12.8-13.2 percent in constant currency and 16.2-16.6 percent as per December 31 exchange rate when dollar was Rs.66.16,” the city-based IT bellwether said in a statement here.

Under the International Financial Reporting Standard (IFRS), the outsourcing major increased the annual guidance to 12.8-13.2 percent in constant currency and 8.9-9.3 percent on the exchange rates in dollar terms for Fiscal 2016.
This is the second time in this fiscal (FY 2016), the company revised guidance owing to volatile currency impacting the rupee in the foreign exchange market.

On October 10, the company upped its guidance to 13.1-15.1 percent from 11.5-13.5 percent in rupee terms but lowered to 6.4-8.4 percent from 7.2-9.2 percent in dollar terms as projected in July due to currency volatility depreciating the rupee.

The company also increased the conversion rate again by 0.57 cents again to Rs.66.16 per dollar from Rs.65.59 on September 30 on a stronger greenback. Earlier, the company reported Rs.3,465 crore net profit for third quarter (Oct-Dec) of this fiscal, posting 6.6 percent year-on-year (YoY) growth and 2 percent up sequentially, as per the Indian accounting standard.

Similarly, consolidated revenue grew 15.3 percent YoY and 1.7 percent sequentially to Rs.15,902 crore for the quarter under review (Q3).

Under the International Financial Reporting Standard (IFRS), net income, however, was fractional (0.4 percent) up YoY and 0.9 percent sequentially to $524 million but gross income (revenue) grew 8.5 percent YoY and 0.6 percent quarterly to $2,407 million ($2.41 billion).

“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,” Infosys chief operating officer U.B. Pravin Rao said in a statement.

Operating profit at Rs.3,959 crore is up 7.3 percent YoY from Rs.3,689 crore in like period year ago but 0.9 percent less sequentially from Rs.3,993 crore quarter ago. In dollar terms, operating profit at $599 million is 1.2 percent up YoY from $592 million but declined 1.8 percent from $610 million in second quarter (July-September). Volume growth for the quarter was 3.1 percent sequentially.

Buoyed by the growth and revised guidance, the company’s blue chip scrip soared on the stock markets, with its Rs.5 per share soaring Rs.51.65 or 4.77 percent to Rs.1,134 by noon from opening price of Rs.1068 and Wednesday’s closing rate of Rs.1,082.35 on the Bombay Stock Exchange.

“We have been able to navigate the quarter better than our expectations. We will focus on enhancing operational efficiency through multiple levers in the coming quarters,” chief financial officer M.D. Ranganath said in the statement.

The company and its subsidiaries worldwide added 75 clients during the quarter as against 82 quarter ago and 59 year ago, taking the total number of customers to 1,045 from 1,011 quarter ago and 932 year ago.

The company’s liquid assets, including cash and cash equivalents declined sequentially to Rs.31,526 crore from Rs.32,099 crore quarter ago in rupee terms and to $4,765 million from $4,894 million in second quarter (July-September).

Though the company hired 14,027 in the quarter, exit of 8,620 techies resulted in net addition of 5,407 and taking the total number of employees to 193,383 by December 31 from 187,976 quarter ago (September 30) and 169,638 year ago.

Gross addition in quarter ago was 17,595 and 13, 154 year ago, while 9,142 left quarter ago and 8,927 year ago, leading to net addition of 8,453 quarter ago and 4,227 year ago. As a result, attrition declined to 13.4 percent on standalone basis in the parent company from 14.1 percent quarter ago and 18.2 percent year ago.

On consolidated basis, attrition during the last 12 months declined to 18.1 percent from 19.9 percent quarter ago and 213 percent year ago.

“Our 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,” Rao added. (IANS)