Infosys reports marginal fall in June quarter net profit

Infosys Hikes 2018 Revenue Forecast Despite Stagnant IT Spending

Under the IFRS, Q1 net income was up 5.8 per cent YoY to $541 million from $511 million year ago and flat (0.4 per cent) sequentially from $543 million quarter ago in dollar terms.

IT outsourcing firms are also facing pressure as traditional businesses such as routine infrastructure maintenance are seeing their margins squeezed as clients demand more work for less money, pushing the sector to develop cloud, data analytics and cyber security services. The new high growth services had contributed 8.3 per cent to overall revenue and new software has contributed 1.6 per cent to revenue, he said.

"Going forward, we will count on strong growth coming from these services", added Sikka, who signalled his intent by arriving at the press conference in a driverless golf cart.

With the advances in automation technology, the Infosys CEO feels that more and more of commoditising jobs have been vanishing. While CFOs are not normally seen as adding directly to top and bottom lines, having the CFO close by means faster decision taking on matters that do impact results, coupled with the welcome relief of far fewer sleepless nights.

After Tata Consultancy Services Ltd's (TCS) weak performance in the June quarter, Infosys Ltd's results came as a relief for investors.

Global financial services major Morgan Stanley expected Infosys to post net profit of Rs 3,335 crore on revenues of Rs 17,119 crore in the June quarter. Infosys on Friday said that it has released 3,600 people during April-June quarter. This was higher than the revenue growth guidance of 2.5%-4.5% issued by the company at the time of announcing Q4 March 2017 earnings.

Sikka said, the surge in revenue per employee in the last six months, reflects the successful implementation of optimization efforts. According to the company's annual report for last fiscal, Ranganath received a total compensation of Rs 9.24 crore, which included fixed pay (Rs 2.84 crore ), bonus (Rs 1.80 crore) and incentives and performance-based stock incentives (Rs 4.5 crore) in 2016-17.

In the last quarter, he said the company trained over 3,000 people on AI technology and of this 2,100 people were trained on Infosys's next-generation AI platform, Nia.

"This is one of the examples of the training we provide to our employees".

To counterbalance those macro trends, Infosys focused on optimizing utilization, hitting 84%, net of new hires, the highest level in the company's history.

For the next quarter, the company said the operating margins can be anywhere between 23 and 25 percent. June quarter annualised consolidated employee attrition stood at 21.0 per cent versus 21.0 per cent year ago.

Ranganath is now moving to the U.S. to execute the company's plans to hire 10,000 people in the coming few years.

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