Infosys, India’s second biggest IT outsourcer, today reported a net profit of Rs. 3,726 crore for the July-September quarter, beating the Street’s estimates. But the outsourcer cut its growth guidance for the year, disappointing the Street. This is the first quarterly result announced by the Bengaluru-based outsourcer after co-founder Nandan Nilekani returned at the helm as chairman in August.
Infosys reported a net profit of Rs. 3,726 crore for the quarter ended September 30, 2017, up 7 per cent sequentially and 3.4 per cent year-on-year. Analysts on average had expected Infosys to post a net profit of Rs. 3,523 crore, according to Reuters. Revenues rose 2.9 per cent sequentially to Rs. 17,567 crore.
Meanwhile, cutting its growth guidance for the year, Infosys said revenues are expected to grow 5.5-6.5 per cent in constant currency terms in the current fiscal years, compared to 6.5-8.5 per cent growth as guided earlier.
“We continue to focus on executing on the theme of software enabled services and on accelerating growth of our new services portfolio.” said UB Pravin Rao, Interim CEO and Managing Director.
“During the quarter, we responded quickly to the management and Board changes through proactive communication with all stakeholders minimizing any negative impact to the business and allowing us to deliver growth across all our large industry units.”
In dollar terms, Infosys’ revenue rose 2.9 per cent sequentially to $2,728 million dollar. Reliance Securities had estimated Infosys’ Q2 revenue at $2,732 million. In the June quarter, Infosys had reported dollar revenue of $2,651 million.
In constant currency terms, Infosys’ revenues grew 2.22 per cent sequentially. Reliance Securities had estimated its constant current revenue sequential growth at 2.4 per cent.
Its EBIT margin or operating margin came in at 24.2 per cent vis-a-vis 24.1 per cent in June quarter. Reliance Securities had estimated Infosys’ EBIT margin at 23.3 per cent for the Q2. “Our focus on improving operational efficiencies enabled us to deliver stable margins in the quarter and at the same time provide compensation increases and higher variable payouts to our employees.” said Infosys CFO MD Ranganath.
On the progress for identifying new CEO, Infosys said: “The process of identifying the next CEO and shareholder consultation outreach have been initiated and are progressing well.”
Infosys shares today closed 1.4 per cent lower at Rs. 926. The outsourcer announced its results after the market closing today. Infosys shares have underperformed the broader indices his year, falling nearly 8 per cent, compared to a gain of 25 per cent in the broader Nifty.