Gives 100% bonus to employees to stem attrition. In Q3, company saw attrition of about 8,900 from about 10,100 in Q2 and 10,600 in Q1
Country’s second largest software services firm Infosys on Friday announced 13 per cent jump in its consolidated net profit for the third quarter to Rs3,250 crore on the back of increase in business and clients from North America as also from India.The company’s consolidated revenue rose 5.9 per cent to Rs13,796 crore in the quarter ended December 31, while it maintained its revenue outlook for the entire fiscal ending March 31.Increasing its focus on software products and new age solutions like Artificial Intelligence, Internet of Things, Infosys also said it has expanded its innovation fund from the $100 million to $500 million, which will be used to invest in young firms world-wide.
Reacting to the results, Infosys shares rose by over 5 per cent to Rs2,073.60 apiece on the BSE, lifting the overall market.Commenting on the firm’s performance, Infosys CEO Vishal Sikka said: “We are excited by several breakthrough results in Q3. Our ‘renew and new’ strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption.”In dollar terms, Infosys posted 12.7 per cent jump in net profit to $522 million, while revenue was up 5.6 per cent to $2.21 billion in the third quarter.
Brokerage firm Angel Broking’s Sarabjit Kour Nangra said that the third quarter profits are better than expected, while a sequential growth of 0.8 per cent in revenues at $2.2 billion is also in line with the expectations.Infosys COO UB Pravin Rao said: “During the quarter, we saw broad-based volumes growth, increased utilisation and strong client additions. We have made 100 per cent variable payout for Q3 and have seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters.”
During the third quarter, 2014-15, the firm added 4,227 people (net), taking its total headcount to 1,69,638. Infosys and its subsidiaries also added 59 clients (gross) during the quarter. On a quarter-on-quarter basis, Infosys’ net profit was higher by 4.9 per cent, from Rs 3,096 crore in the July- September period; revenue grew 3.4 per cent from Rs 13,342 crore in the second quarter of the 2014-15 fiscal.
“Our sequential revenue growth in Q3 was adversely impacted to the extent of 1.8 per cent due to US dollar appreciation against other major currencies,” Infosys CFO Rajiv Bansal said.Speaking from a geographical perspective, Rao said: “We have seen good demand in North America barring few verticals, Europe is a bit intense.”North America grew by 2.1 per cent sequentially, while India grew by 14 per cent quarter-on-quarter. Europe declined by 2.1 per cent sequentially and Rest of the world declined by 2.3 per cent q-o-q.
“If you look at it from verticals perspective, financial services \\we are seeing good traction with more traction in Europe than in America. If you look at manufacturing we are seeing fair limited growth and pipeline,” Rao added. Sikka said Infosys achieved utilisation rates which are highest in the last 11 years. He also announced a bonus variable pay of 11 per cent for the employees in a bid to check the attrition. “We saw drop in attrition in absolute terms, in Q3 we saw attrition of 8,900 this quarter from 10,100 in Q2 and 10,600 in Q1. We are seeing continued drop in attrition which, we continue to monitor and continue to be excited about as we look to the future.
As a result of this achievement we are announcing 100 per cent variable bonus pay out for our units in the company,” he added.Attrition level inched higher to 20.4 per cent in the reported quarter compared to 20.1 per cent in September 2014 quarter and 18.1 per cent in October-December 2013 quarter.Utilisation rates grew to 75.7 per cent (including trainees) and 82.7 per cent (excluding trainees) in the said quarter.Sikka commended India for having a “thriving start-up scene”.
“So one of the things I am very excited about is our board has approved expanding our start-up plan firm from $100 million to $500 million and we will dedicate a part of that investing in India,” Sikka said.North Americas contributed 61.6 per cent of the quarter’s revenues, while Europe, India and Rest of the World (RoW) markets accounted for 24 per cent, 2.5 per cent and 11.9 per cent respectively.