Infosys Q4 net profit up 2.4% to ₹3,690 crore
EARNINGS BOOST IT firm’s revenue grows 5.6% to ₹18,083 cr in March quarter BENGALURU:
The country’s second-largest software services major Infosys on Friday reported 2.4% growth in consolidated net profit at ₹3,690 crore for the quarter ended on March 31, 2018.
It had posted a net profit of ₹3,603 crore in the year-ago period according to IFRS accounting norms, Infosys said in a BSE filing.
Revenues of the Bengalurubased firm grew 5.6% to ₹18,083 crore in the January-March quarter compared with ₹17,120 crore in the year-ago period.
Infosys said it expects revenue for 2018-19 to grow in the range of 6-8% in constant currency terms and 7-9% in US dollar terms. For the full fiscal 2017-18, profit was up 11.7% at ₹16,029 crore, while revenues grew 3% to ₹70,522 crore over the previous year.
“I am pleased with our healthy revenue growth, profitability, and cash generation in Q4. Our robust performance is a reflection of the strong impact we have with our clients and the dedication of our employees,” Infosys CEO Salil Parekh said.
He added that the company will execute its strategy around the four pillars—scaling digital business ($2.79 billion in revenue currently), energizing client’s core technology landscape via AI and automation, re-skilling employees, and expanding localisation in markets like US, Europe, and Australia.
Infosys COO Pravin Rao said the company will be rolling out compensation increases for a large part of its workforce, effective April 1.
The Infosys board in its meeting on Friday decided to retain the current policy of returning up to 70% of the free cash flow of the corresponding financial year.
“In addition to the above, out of the cash on the Balance Sheet, the Board has identified an amount of up to Rs 13,000 crore to be paid to shareholders,” it added.
This will be done through a special dividend of ₹10 per share (resulting in a payout of about ₹2,600 crore in June 2018). Also, an amount of up to ₹10,400 crore has been identified to be paid out to shareholders for the Financial Year 2019 in a manner to be decided by the board.
Infosys said it has decided to sell its subsidiary Panaya—the Israeli firm whose acquisition became a contentious issue between the founders and the erstwhile management led by Vishal Sikka.
The Bengaluru-based firm is also looking at offloading its other subsidiaries Kallidus and Skava.
“In the quarter ended March 31, 2018, on conclusion of a strategic review of its portfolio of businesses, the company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as ‘Skava’) and Panaya (collectively referred to as ‘disposal group’),” Infosys said in a regulatory filing.
The company expects the sale to be completed by March 2019. “Accordingly, assets amounting to ₹2,060 crore ($316 million) and liabilities amounting to ₹324 crore ($50 million) in respect of the disposal group have been reclassified and presented as ‘held for sale’,” Infosys said.
Infosys said upon reclassification, an impairment loss of ₹118 crore ($18 million) in respect of Panaya has been recognised in the consolidated profit and loss for the quarter and year ended March 31, 2018.
The corresponding writedown in the investment value of Panaya in the standalone financial statements of Infosys is ₹589 crore ($90 million), it added.
A whistleblower report last year alleged wrongdoings by Infosys and some officials in the $200 million acquisition of Israeli automation technology firm Panaya.
An internal audit committee set up by Infosys found no evidence supporting the whistleblower’s allegations.