Infosys posts 3.7% rise in Q1 net profit

Bengaluru, July 13: Infosys, India’s secondbiggest software services exporter, on Friday posted a lower- than- expected 3.7 per cent rise in net profit for the quarter ended on June 30, 2018, due to a one- off charge related to fair value reduction of up- for- sale Panaya business.

The company also announced a surprise element, a 1: 1 bonus share - that is one free share for every share held.

The consolidated net profit in April- June at ` 3,612 crore, or ` 16.62 a share, was higher than ` 3,483 crore, or ` 15.24 a share, net earnings in the same period of the previous fiscal.

“Overall, we see a good demand environment across the US, Europe and Asia Pacific. In terms of the sector demand, we see strength in energy, utilities, retail, insurance and manufacturing,” Infosys CEO Salil Parekh told reporters here.

On a sequential basis, the profit, however, declined 2.1 per cent from ` 3,690 crore posted in January- March quarter. Infosys said it accounted for ` 270 crore reduction in fair value of Panaya business in the quarter.

“On re- measurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the company has recorded a reduction in the fair value of Disposal Group held for sale amounting to ` 270 crore in respect of Panaya. Consequently, profit for the three months ended June 30, 2018, has decreased by ` 270 crore resulting in a decrease in basic earnings per equity share by ` 1.24 for the quarter ended June 30, 2018,” Infosys said.

The $ 200 million Panaya buy had been one of the flashpoints between Infosys’ founders led by N. R. Narayana Murthy and its former management but interestingly, the new Infosys board under Nandan Nilekani’s leadership gave a clean chit to the Panaya deal saying there was no merit in any allegations of wrongdoing.

Kotak Securities’ Sanjeev Zarbade said Infosys results missed the street estimates.