Country’s second largest software exporter, Infosys on Friday beat the street expectation and announced better-than-expected 16 per cent rise in the fourth-quarter net profit and forecast strong revenue growth for the current fiscal on new client additions.
Consolidated net profit at Rs3,597 crore in the January- March period of last fiscal was 16.2 per cent higher than Rs3,097 crore net earning in the same period of 2014-15, the company said in a statement.
Turnover rose 23.4 per cent to Rs16,550 crore in the fourth quarter of 2015-16.
On a sequential basis, Infosys' net profit rose 3.8 per cent from Rs3,465 crore in the October-December quarter while revenue was up 4.1 per cent from Rs15,902 crore during the same period.
Infosys said sales will rise between 11.8 per cent and 13.8 per cent in US dollar terms in the 2016-17 fiscal year that began on April 1. Revenue will grow between 11.5 per cent and 13.5 per cent in constant currency terms, indicating a faster growth rate than the industry average as the company shifts to high-margin digital services business.
Under Vishal Sikka, the company's focus has been artificial intelligence, adding new contracts and keeping hold of staff to boost sales. This together with acquisitions has helped turn around Infosys that was losing share to rivals like Tata Consultancy Services and Cognizant.
Infosys, whose board in February extended Sikka's term as Chief Executive by another two years to 2021, added 89 clients in the last quarter, including 5 large clients who pay more than $50 million annually.
Sikka is eyeing revenue of $20 billion by 2020, more than double of $9.5 billion sale in 2015-16.
"Over the course of this year, we saw this strategy of bringing automation and innovation to our clients, on a foundation of learning and education, start to show results in the organic growth of our client relationships, in our win rates in large deals, and in the types of projects we are seeing in strategic areas where we never participated before," he said.
Gartner Research Director Arup Roy said the results are a clear indication that Infosys has turned around the ship.
"It has a solid growth story ahead. The guidance is also in line with the industry, in fact on the higher side," he added.
Infosys has been posting strong set of numbers in the previous quarters that has raised investor hopes of an imminent turnaround of fortunes and a return to its former industry bellwether status under Sikka.
In US dollars, Infosys' net profit grew 7 per cent to $533 million in the March quarter from $498 million in the year-ago period while revenues rose 13.3 per cent to $2.44 billion from $2.15 billion a year ago.
"Our growth trajectory improved in FY16 and we navigated the external business environment well. We will continue to focus on leveraging operational efficiency levers for consistent profitable growth," Infosys CFO MD Ranganath said.
During the quarter, cash generation was strong and Infosys managed a volatile currency environment effectively, he added.
Infosys said its quarterly annualised attrition rate has declined to 17.3 per cent in January-March of 2016.
For the March quarter, Infosys' total headcount stood at 1,94,044 as against 1,76,187 a year ago.
Net additions in the March quarter stood at 661 people.
"Employee attrition reduced further in Q4, and is reflective of increased engagement with our people all through the year, and our steps to make Infosys an exciting place for the world's best talent.
We continue to reimagine our internal processes to increase organisational agility," Infosys COO UB Pravin Rao said.
On visa-related issues, Sikka said the answer is a "combination of local hiring, better solutioning and the next generation technology collaboration" that will help deliver the best value.
Infosys Board has recommended a final dividend of Rs14.25 per equity share for the financial year ended March 31, 2016.
For 2015-16, profit was up 1.9 per cent at $2.05 billion while revenues grew 9.1 per cent to $9.5 billion.
The company said it has appointed Mohit Joshi, Ravi Kumar S and Sandeep Dadlani as presidents with effective immediate effect.
Cash and cash equivalents, available-for-sale financial assets, certificates of deposits and Government bonds were Rs34,468 crore as of March 31.
In 2015-16, over Rs216 crore ($33 million) contributed by Infosys was utilised across projects related to healthcare, education, culture, destitute care and rural development, it said.
In addition, the company has spent Rs86 crore ($13 million) crore on multiple initiatives including Chennai flood disaster relief, environment sustainability and conservation of natural resources aimed at long-term sustainability of ecosystem.
India's largest software services firm Tata Consultancy Services (TCS) and Wipro will announce fourth quarter results on April 18 and April 20 respectively.