Infosys offers buyback, as profit crashes 30%
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.