Infosys June net profit falls below previous quarter, company retains FY18 revenue guidance

To everybody's amusement, CEO Dr. Vishal Sikka and COO U B Pravin Rao arrived for the announcement of results in an autonomous or driver-less cart which, Sikka said, was built by Infosys engineers in Mysuru, according to media reports.

The company reported revenue of Rs 17,078 crore for the quarter ended June 30, 2017, down  0.2% from the previous quarter but up 8% from the same quarter a year ago. 

Operating profit was Rs 4,111 crore for the reported quarter, down 2.4% from the previous quarter and up 1.6% from the year ago quarter.

Net profit declined 3.3% from the previous quarter but showed a year-over-year growth of 1,4% to Rs 3,483 crore in the reported quarter.

However, the company retained its FY 18 revenue guidance of 6.5%-8.5% in constant currency. FY 18 operating
margin guidance retained at 23%-25%.

“Our persistent focus on execution in Q1 is reflected in broad-based performance on multiple fronts– revenue
growth, resilient margins despite multiple headwinds, healthy cash generation and overall business results,"said Dr. Vishal Sikka, CEO.

"I am encouraged by the uptick in revenue per employee for six quarters in a row, and the strong momentum in
our new high growth services and software, as we accelerate our focus on innovation-led growth. The widespread adoption of our grassroots innovation and education initiatives continue to fuel our transformation, and I am proud to see Infoscions embrace and drive Infosys toward becoming a next generation services company,” he said.

The company said that in Q1, it continued to help clients drive automation and innovation into the core of their businesses leveraging Infosys' renewed traditional services and new services in areas such as Cloud Ecosystem, Big Data and Analytics, API and Micro Services, Data and Mainframe Modernization, Cyber Security and IoT Engineering Services, and software-led offerings, especially the next-generation Artificial Intelligence (AI) Platform Nia.

In April, the company launched Infosys Nia to help clients embrace AI. Nia saw 160+ engagements across 70+ clients according to the company.

In April, the company opened a new Development Center focused on Engineering Services in Croatia. In May, it announced that it will hire 10,000 American workers over the next two years and establish four technology and innovation hubs in the US.

The first will open in Indiana in August 2017 and the second hub will be opened in North Carolina. The company expanded its presence in China with a new campus in Shanghai, to create an ecosystem of local talent training, new tech labs and an incubator for startups.

“We had broad-based growth across geographical and industry segments. Our initiatives on operational
discipline led to record levels of utilization and better realization during the quarter.” said U B Pravin Rao,
COO. “Our new services and software offerings are helping us strengthen our positioning in the market.”

In US dollar terms, revenue was $2,651 million for the quarter ended June 30, 2017, up 3.2% sequentially in reported terms and up 2.7% in constant currency terms. YoY revenue growth was 6.0% in reported terms and 6.3% in constant currency terms.

Operating profit was $638 million for the reported quarter, up 0.7% over the previous quarter and 6% YoY.

Net profit was $541 million for the quarter ended June 30, 2017, down 0.4% from the previous quarter but up 5.8% from the same quarter a year ago.

“Our relentless focus on strong cash generation led to a healthy operating cash flow. Further, our continued
emphasis on operational efficiencies enabled us to mitigate the impact of margin headwinds during the quarter.”
said M D Ranganath, CFO. “We successfully navigated yet another quarter of significant currency volatility
through our hedging."

Image: Vishal Sikka twitter