Infosys beats second quarter expectations

Bengaluru: Infosys, India’s second-largest IT services exporter reported 9.8 per cent rise in its second quarter net profit, surpassing analysts’ expectations. The company also announced its chief financial officer Rajiv Bansal’s resignation from his post effective Monday. Infosys said Mr Bansal will be replaced by its head of strategic operations M.D. Ranganath.

Net profit for the quarter grew to Rs 3,398 crore from Rs 3,096 crore in the year-ago period. Revenue grew 17.2 per cent from Rs 13,342 crore to Rs 15,635 crore. Emphasising that revenue growth in the September quarter was the highest in the last 16 quarters, Infosys CEO-MD Vishal Sikka credited operational efficiencies and introduction of new initiatives for the growth. “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,” Mr Sikka said.

Announcing the highlights of the quarter, Mr Sikka said Infosys had signed five large deals with total contract value of $983 million and had added 82 clients — including TOMS Shoes, Swiss-based engineering multinational ABB, and American luxury retail store chain Saks Fifth Avenue — taking the total number of the company’s clients to over 1,000.

He said that the company was focusing on using automation and artificial intelligence to design intelligent systems “to solve complex emerging problems and acquire client confidence.” For the full fiscal, Infosys said revenue in dollar terms is likely to grow 6.4 per cent to 8.4 per cent, lower than previous guidance of 7.2 to 9.2 per cent, as broad weakness in IT spending and a stronger dollar are making clients wary.

Why did CFO quit?
Rajiv Bansal’s (ex-CFO) resignation on the day of the quarter results announcement, effective immediately, remained a point of discussion during the announcement. “After 15 years of serving Infosys, if he [Bansal] wants to do something else that interests him, we are happy for him,” Mr Sikka said while calling him a ‘brilliant CFO’.

Markets fall after Infosys lowers revenue target

The equity markets started the week on a negative note dragged down by a 4 per cent fall in the shares of Infosys Technologies after the company lowered its FY16 revenue growth guidance in dollar terms while announcing its September quarter results.

This led to weakness in other leading software exporters like Wipro and TCS, which pulled down the markets on Monday. The Sensex dropped 175.40 points or 0.65 per cent to end the trading session at 26,904.11 and the Nifty ended the day at 8,143.60, down 46.10 points or 0.56 per cent.

Market participants added that the investor sentiments also remained cautious ahead of the release of key macro-economic data like IIP and consumer price inflation data. While the shares of TCS slipped 1.42 per cent, the Wipro shares declined by 1.41 per cent. FPIs purchased shares worth Rs 317.56 crore, data released by stock markets said.