Infosys Q2 net up 12% q-o-q at Rs 3,398 crore

Despite posting a strong financial quarter in terms of revenue growth and profitability, Infosys indicated some weakness ahead when it cut its revenue guidance for the full year.

The Bengaluru-based company said it is now expecting its dollar revenue for FY16 to grow between 6.4–8.4% as against the earlier projected 7.2–9.2%, indicating some weakness in deal flows going forward.

The company kept its FY16 revenue guidance at 10-12% in constant currency terms.

In the quarter ended September 30, 2015, Infosys reported 9.8% growth in its net profit at Rs 3,398 crore when compared with the corresponding quarter the previous fiscal. The revenue at Rs 15,635 crore grew 17.2% on an year-on-year basis as it continued to attract business from clients in the US and Europe.

On sequential quarter basis, the net profit grew 12.1% while revenues jumped 8.9%.

In dollar terms, the company posted sequential revenue growth of 6%, the highest in the last 16 months.

“At Infosys, we are taking steps towards becoming such a services organisation, and I am encouraged by our progress. While results in any one quarter are transitory snapshots of a long journey, we do see our focused execution along our strategy starting to produce encouraging results for our clients, shareholders and Infoscions,” said Vishal Sikka, CEO and MD, Infosys.

The company also announed that CFO Rajiv Bansal will step down with immediate effect; he will be replaced by M D Ranganath.

“We had strong all-round growth during the quarter driven by recent initiatives around service differentiation, improvement in client mining and higher focus on winning large deals,” said U B Pravin Rao, Chief Operating Officer. “Increase in revenue productivity was significant, volume growth was robust, client metrics and utilisation improved while attrition remained stable,” he added.

The company improved its operating margins by 153% over the previous quarter to 25.53%. Infosys added 82 new clients during the quarter while large deals with total contract value of $983 million were signed during the quarter.

Company’s share prices were trading around 3% down on the BSE.

In a statement, Infosys said the Board has approved issuance of new shares, so as not to cumulatively exceed 2% of the shares outstanding, in order to support grants made over time under the 2015 incentive compensation plan.

Infosys Technologies Limited