Infosys reports mixed Q3, new CEO promises priority update in April

13 January, 2018, 02:10 | Author: Angelina Schmidt
  • Stripped of a one-time gain in the US Infosys’s quarterly profit would have been down 1.2% sequentially to $571 million

Analysts at HDFC Securities projected profits of Rs 5,182 crore, including the tax reversal, which implies they expected Infosys to report profit growth of 1 percent, excluding the tax reversal component.

Infosys explained that during the December 2017 quarter, it had signed an Advance Pricing Agreement with the United States administration that had led to reversal of income tax expense provision of Rs 1,432 crore.

In US dollar terms, Infosys' net profit grew to USD 796 million in the said quarter, while revenues were at USD 2.7 billion from the year-ago period.

Revenue for the nine months ended 31 December 2017 stood at Rs52,439 crore, showing an year-on-year growth of 2.1 per cent in reported terms and 5.6 per cent growth in constant currency terms.

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

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In rupee terms, there was a growth of 1.3%.

"On account of the conclusion of an APA (Advance Pricing Agreement) with the US Internal Revenue Service during the quarter, net profit for Q3 increased", it added in the statement.

Investors and market watchers are expecting to hear from Infosys' new CEO Parekh on his strategy to spur growth for the company that is trying to put behind the nearly year-long public standoff between its high-profile promoters and the past leadership.

The company also had written down an unspecified amount invested in its innovation fund investment DWA Nova LLC, which impacted its net profit by $11 million (Rs 70 crore). "We had 8 per cent year-on-year growth and 24.3 per cent operating margin with $593 million of free cash flow".

Newly appointed Infosys Chief Executive Officer and Managing Director Salil Parekh said on Friday he will stay connected with the founders so the company stays true to its vision and beliefs, and announced he will outline a new strategy in April.

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"We are progressing towards stability and are well positioned to serve our clients in the new areas of demand", Parekh said in a press release, after close of Mumbai trading on Friday.

Recalling his pleasant interaction with the founders at the Infosys Prize event two days ago, Parekh said he would continue to have a cordial relationship with them.

Chief Financial Officer M.D. Ranganath said operating margins were stable on improvement in efficiency parameters.

Parekh's appointment came after several months of public spat between the founders and Sikka along with some board members, on issues of corporate governance and transparency.

COO Pravin Rao said: "Increased adoption of our digital offerings and new services helped stabilize price realization. We also executed the share buyback of Rs 13,000 crore in line with our capital allocation policy", he added.

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