Published: Fri, January 12, 2018
Money | By Armando Alvarado

Infosys net up 38% in Q3, lowers outlook

Infosys net up 38% in Q3, lowers outlook

Revenues were $ 2,755 million while Operating profit stood at $ 669 million for the quarter ended December 31, 2017.

The improved scenario is the result of clear vision, and adoption of digital offerings that has helped company to spring up.

Analysts at HDFC Securities projected profits of Rs 5,182 crore, including the tax reversal, which implies they expected Infosys to report profit growth of 1 percent, excluding the tax reversal component.

By these figues, Infosys had witnessed a jump of 37.6 per cent on a quarter-on-quarter basis and 38.3 per cent on a year-on-year basis. As per the pact, Infosys reversed tax provisions of about $225 million made in previous periods. The earnings per share of the company grew by 39%, and stood at Rs 22.55, as against Rs 16.22 in the corresponding quarter last fiscal.

Sikka left abruptly in June following criticism from several executives, led by co-founder Narayana Murthy, over strategy and alleged corporate governance lapses. "Our Q3 performance is strong....24.3% operating margin with $593 million of free cash flow".

Salil Parekh, CEO & MD of Infosys said, "It is a privilege for me to be appointed as the CEO & MD of Infosys, helping our clients navigate the digital future and employees build new skills and capabilities". Mr. Parekh, 53, an ex-Capgemini veteran, said.

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Parekh, who is only the second outsider to lead the Bengaluru-headquartered company, said the market offered tremendous opportunities in newer areas such as data, analytics, machine learning and artificial intelligence. There are exciting opportunities in IT services market.

M.D. Ranganath, CFO said operating margins were stable due to broad-based improvement in operational efficiency parameters. "However, given the regulatory overhang (US tax reforms impact) and sluggishness pick-up in spend in BFSI segment (32% of total revenue), we maintain a hold rating on the stock with a revised price target of Rs 2,950", the brokerage said. The company also announced that, with the appointment of Salil Parekh as the CEO and Managing Director of the company for a period of 5 years, the Committee of Directors stands dissolved with effect from January 12, 2018.

"During the quarter, we provided compensation increases and higher variable payouts to our employees".

"Our cash generation continued to be robust during the quarter", he said. "Our investments in employees continues to deliver results as reflected in lower attrition". "We successfully executed the share buyback of Rs13,000 crore in line with our capital allocation policy".

It came a day after TCS reported an nearly four percent decline in earnings due to falling demand for its banking and financial services.

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