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Indian tech major Infosys posts 5.1% rise in net profit

Global software major Infosys on Friday reported Rs37,980mn consolidated net profit for the first quarter (Q1) of fiscal 2019-20, registering 5.1% annual growth from Rs36,120mn in the same period a year ago.
Sequentially, however, net profit in Q1 declined 6.8% from Rs40,780mn a quarter ago.
In a regulatory filing on the BSE, the city-based IT behemoth said consolidated revenue for the quarter under review (Q1) grew 14% year-on-year (YoY) to Rs218,030mn from Rs 191,280mn in the like period a year ago.
Sequentially, however, revenue for Q1 marginally grew 1.2% from Rs215,390mn a quarter ago.
Under the International Financial Reporting Standard (IFRS), net income grew YoY 2.2% to $546mn from $534mn in the same period a year ago but declined 6.8% sequentially from $580mn a quarter ago.
Similarly, gross income grew 10.6% YoY to $3,131mn in Q1 from $2,811mn in the same period year ago and up 2.3% sequentially from $3,060mn a quarter ago.
Operating profit declined 1.5% annually to Rs44,700mn for Q1 from Rs45,370mn a year ago and 3.2% sequentially from Rs46,180mn a quarter ago.
“Operating margin declined 3.2% annually to 20.5% for Q1 from 23.7% year ago and was flat (0.9%) from 21.4% a quarter ago,” said the outsourcing firm in a statement here.
Under IFRS, operating profit declined 4.2% annually for Q1 to $642mn from $670mn a year ago and 2.3% from $658mn a quarter ago.
Operating margin in dollar terms declined 3.2% YoY to 20.5% for Q1 from 23.7% a year ago and 2.3% a quarter ago.
Addition of 70 new clients during the quarter has taken their total number to 1,336, against 1,279 a quarter ago and 1,214 a year ago. “We had a strong start to the fiscal, with 12.4% annual growth in constant currency and digital business of $1,119mn contributing 35.7% to the total revenue,” said chief executive Salil Parekh on the occasion.
The company added 906 techies during the quarter, taking the total headcount to 2,29,029 from 2,28,123 a quarter ago.
The addition for the last 12 months however, was 19,124 from 2,09,905 a year ago, with women accounting for 37% in Q1 from 36.7% a quarter ago and 36.5% a year ago.
“The digital revenue growth has made us raise the revenue guidance to 8.5%-10% from 7.5%-9.5% projected in April for the fiscal,” added Parekh.
The consolidated attrition rate, however, increased sequentially to 23.4% in Q1 from 20.4% a quarter ago and 23.1% a year ago.
“We had a good quarter and continue to leverage our digital navigation framework to help clients build and nurture their live enterprise,” said chief operating officer Pravin Rao. The company won a whopping $2.7bn large deal in terms of total contract value in the quarter.
“Segment growth was robust with all large regions and most verticals growing at double digits YoY in constant currency,” noted Rao.
Chief financial officer Nilanjan Roy said the company had revised its capital allocation policy upwards to distribute 85% of free cash flows cumulatively over a 5-year period to improve shareholder’s returns.
“The first quarter results and focus on operational efficiencies gives us confidence on revenue and margin guidance for the fiscal,” added Roy.
The company’s blue-chip scrip of Rs 5 face value gained Rs6.25 at the end of Friday’s trading on the BSE to close at Rs727.10 against the Thursday’s closing rate of Rs720.85 and opening price of Rs723.30.

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