Infosys’ net profit, revenue grow in double digits in Q2

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Bengaluru: Infosys CEO and MD Salil Parekh, COO Pravin Rao, CFO Ranganath during a press conference organised to announce company's Q2 results in Bengaluru on 16, 2018.
Bengaluru: Infosys CEO and MD Salil Parekh, COO Pravin Rao, CFO Ranganath during a press conference organised to announce company's Q2 results in Bengaluru on 16, 2018. (Photo: IANS)

Global software major Infosys on Tuesday reported double-digit annual growth in net profit and revenue for the second quarter of fiscal 2018-19.

While the IT major’s consolidated net profit for the quarter under review (Q2) grew 10.3 per cent year-on-year (YoY) to Rs 4,110 crore from Rs 3,726 crore a year ago, consolidated revenue was up 17.3 per cent YoY to Rs 20,609 crore from Rs 17,657 crore a year ago, gaining significantly from a weakening rupee against a strong US dollar.

“Sequentially, net profit grew 13.8 per cent from Rs 3,612 crore and revenue 7.3 per cent from Rs 19,128 crore a quarter ago,” said the company in a statement here.

Under the International Financial Reporting Standard (IFRS), net income in Q2, however, was flat (0.5 per cent) annually at $581 million from $578 million in the same period a year ago but up 8.8 per cent sequentially from $534 million a quarter ago.

Similarly, revenue in dollar terms grew in Q2 7.7 per cent annually to $2,921 million from $2,728 million year ago and 3.2 per cent from $2,832 million a quarter ago.

The company, however, retained revenue guidance for the fiscal (FY 2019) at 6-8 per cent YoY and operating margin at 22-24 per cent YoY.

“Operating margin for the second quarter at 23.7 per cent is at the higher end of our guidance range,” noted the statement.

Digital revenue at $905 million, accounted for 31 per cent of the total revenue and grew 33.5 per cent YoY and 13.5 per cent quarterly.

“We have also signed a large deal of $2 billion,” claimed the company but did not disclose the client’s name, its geographic location and the vertical it operates.

The board declared 140 per cent interim dividend of Rs 7 per share of Rs 5 face value.

“We have also allotted over 218-crore fully paid-up equity shares of Rs 5 face value as bonus issue, which was approved by shareholders through postal ballot during the quarter,” added the statement.

The company issued bonus shares to celebrate its 25th year of public listing in 1993.

The company’s blue-chip scrip of Rs 5 face value lost Rs 2.70 per share to close at Rs 696.40 at the end of Tuesday’s trading on the BSE, as against Monday closing price of Rs 699.10 and opening price of Rs 709. It was also quoted at a high of Rs 713.75 and a low of Rs 688.10 during the intra-day trading session.

“Broad-based growth across segments and geographies during the quarter is a testimony to strong client relationships, digital-led full service capabilities and focus on the needs of our clients,” said Infosys Chief Executiven Salil Parekh on the occasion.

Large deal wins of over $2 billion demonstrate increased client relevance and give the company a better growth visibility for the near-term.

“We had another quarter of solid operating parameters, with utilisation being stable and offshore mix improving to all-time high. Our digital services grew double digits sequentially, while growth in top clients was also robust,” said Chief Operating Officer U.B. Pravin Rao.

Operating cash flow was over $1 billion during the first half of the year and return on equity (RoE) was 24.7 per cent.

“Our focus on strong financial performance on multiple fronts continued to deliver results during the quarter. Operating margins for the quarter and half-year was at 23.7 per cent, which is near the top-end of our guidance band”, said Chief Financial Officer M D. Ranganath in the statement.

The company will continue to make strategic investments in digital to leverage opportunities and focus on key operational efficiency parametres.

The outsourcing firm added 73 new customers during the quarter as against 70 a quarter ago and 72 a year ago, taking the total number of active clients to 1,222 from 1,214 a quarter ago and 1,173 a year ago.