In­fosys of­fers buy­back, as profit crashes 30%

DNA (Delhi) - - FRONT PAGE -

The coun­try’s sec­ond-largest soft­ware ex­porter In­fosys re­ported on Fri­day a 30 per cent fall in quar­terly prof­its amid sea­sonal weak­ness in the IT sec­tor and mount­ing ex­penses.

The Ban­ga­lore-head­quar­tered com­pany also an­nounced board ap­proval for the buy­back of shares worth Rs 8,260 crore ($1.184 bil­lion) and raised its rev­enue fore­cast for the cur­rent fi­nan­cial year.

“We had an­other strong quar­ter in our dig­i­tal busi­ness with 33.1 per cent growth and large deals at $1.57 bil­lion which gives us con­fi­dence en­ter­ing 2019,” chief ex­ec­u­tive Salil Parekh said in a state­ment.

Net profit in the three months to De­cem­ber 31 came in at Rs 3,610 crore ($511.94 mil­lion), below the Rs 5,129 crore mark in the same pe­riod a year ear­lier.

Bengaluru: In­dia’s sec­ond largest IT firm In­fosys on Fri­day re­ported a 30 per cent drop in its De­cem­ber quar­ter net profit on higher ex­penses even as it ap­proved a Rs 8,260-crore share buy­back -- the sec­ond in less than 13 months.

Its net profit slumped to Rs 3,610 crore in Oc­to­ber-De­cem­ber 2018 from Rs 5,129 crore in the same pe­riod a year ago, the com­pany said in a state­ment.

In spite of the drop in quar­terly profit, the com­pany raised its rev­enue growth fore­cast for the fis­cal year end­ing March 2019 to 8.5-9 per cent in con­stant cur­rency terms, from 6-8 per cent pre­vi­ously.

Rev­enue from op­er­a­tions rose 20.3 per cent to Rs 21,400 crore.

In third quar­ter, ex­penses rose over 26 per cent to Rs 17,021 crore on the back of higher de­pre­ci­a­tion and amor­ti­sa­tion charge and re­duc­tion in car­ry­ing value of Skava.

In­fosys said it will buy back 10.32 crore shares, or 2.36 per cent, for no more than Rs 800 per share – 17 per cent higher than the clos­ing price of Rs 683.70 per share on the BSE.

This is the sec­ond share buy­back in the com­pany’s his­tory. The first was in De­cem­ber 2017. A com­pany can hold a share re­pur­chase pro­gramme only once a year. In­fosys also de­clared a spe­cial div­i­dend of Rs 4 per share.

In its maiden buy­back, In­fosys had re­turned around Rs 13,000 crore to the share­hold­ers by pur­chas­ing stock at Rs „ Net profit Rs 3,610 crore in Oct-Dec 2018 from Rs 5,129 crore in the same pe­riod last year

„ Rev­enue from op­er­a­tions rises 20.3% to Rs 21,400 crore

„ Ex­penses up over 26% to Rs 17,021 crore due to de­pre­ci­a­tion and amor­ti­sa­tion

1,150 per piece.

Pay­ment of spe­cial div­i­dend would en­tail a pay­out of about Rs 2,107 crore and an­other Rs 8,260 crore would be spent on share buy­back.

“With in­creased client rel­e­vance, we saw dou­bledigit (10.1 per cent) year-onyear growth in Q3 on a con­stant cur­rency ba­sis,” In­fosys CEO and MD Salil Parekh said.

San­jeev Hota, AVP Re­search at Sharekhan by BNP Paribas, In­fosys’ per­for­mance sur­prised pos­i­tively with strong top-line growth for the quar­ter, though mar­gin per­for­mance missed the mark.

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