Infosys net dips 28% sequentially in Q4

On Friday Infosys shares rose 0.58% or Rs6.75 to Rs1,169.00 on the BSE while the benchmark Sensex gained 0.27% or 91.52 points to end the day at 34,192.65

The controversial Panaya subsidiary, which led to the fall of Vishal Sikka, has now been put up for sale along with another subsidiary Skava.

He added that the company will execute its strategy around the four pillars - scaling digital business (USD 2.79 billion in revenue currently), energizing client's core technology landscape via AI and automation, re-skilling employees, and expanding localisation in markets like US, Europe, and Australia. Sequentially, however, net profit declined 28.1 per cent, primarily because Infosys had got an income tax reversal of Rs 1,432 crore from an advance pricing agreement signed with USA tax authorities in the preceding quarter, inflating the base.

Mumbai: Bengaluru-based IT bellwether Infosys on Friday said that its net profit for the fourth quarter rose 2.4 per cent to Rs 3,690 crore compared with the same period past year.

Infosys had reported a 7.4% dollar revenue growth (8.3% in constant currency terms) and a 24.7% operating margin in 2016-17.

Dollar revenue growth was at 1.8 percent and in constant currency terms it was 0.6 percent. "It will be effective July 1, 2018, and it is for both onsite and offshore employees", Infosys COO Pravin Rao told reporters.

The company's CFO, Ranganath D. Mavinakere, said the total dividend payout is 30 per cent higher than previous year. After Sikka resigned, the Infosys board - under its new Chairman Nandan Nilekani - gave a clean chit to the acquisition, and dismissed allegations of wrongdoing.

"In the quarter ended March 31, 2018, on conclusion of a strategic review of its portfolio of businesses, the company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as Skava) and Panaya (collectively referred to as "disposal group")", the Bangalore-based company said on Friday. Parekh said Skava and Panaya did not fit into the direction the company wanted to take. "I'm happy with our performance", said CEO Salil Parekh in a post-earnings conference.

Some analysts believe that Infosys's decision to lower its profitability may not cheer the market in the short term but helps the company in the long run as it allows it to win more business when commoditized projects are increasingly seeing pricing pressure.

The company has chose to return up to 70 percent of its free cash flow to shareholders every year in a manner decided by the board, Chief Financial Officer M D Ranganath said, adding that the company was giving $400 million to investors as special dividend immediately.

The company has reported net sales of Rs.18617 crores during the period ended March 31, 2018 as compared to Rs.17866 crores during the period ended March 31, 2017. Ranganath said the firm was generating higher margins in digital deals and is looking to sustain this over the coming months.



Other news