Helped by large deals and increases in client spending, information technology services giant Infosys posted a 25 per cent jump in its consolidated net profit for the quarter ended March 31, 2014. Company's profit rose to Rs 2,992 crore as against Rs 2,394 crore is the same quarter last year.
Reacting to the results, Infosys opened the day on a positive note and gained 4 per cent to Rs 3,371.80 per share but towards day end managed to close 0.76 per cent up at Rs 3,260.45 per share. On revenue front, Infosys reported a jump of 23.2 per cent to Rs 12,875 crore from Rs 10,454 crore during Q4 FY13.
However, one of the largest software services exporters gave subdued revenue guidance for FY15. In its official statement, company said it expects its US dollar revenues to be in the range of 7-9 per cent for the 2014-15 fiscal, which is way below industry body Nasscom's projection of 13-15 per cent. Even in rupee terms, the firm gave a revenue guidance of 5.6-7.6 per cent for the current financial year.
Commenting on the guidance, Infosys CEO and Managing Director S D Shibulal said, "As we have said in the past, our guidance is a statement of fact. We are coming out from a low momentum quarter, Q4 as well as Q3. We have said that some of the challenges that we faced in Q3 and Q4 will continue to be there during the coming year. We have factored in all those things when we have given a guidance of 7-9 per cent."
He added that the firm has been able to double its growth rate for the full year (2013-14) compared to last year, while stating that performance in Q4 FY 14 has been disappointing. In dollar terms, Infosys' profit grew 9.7 per cent to $ 487 million in January-March quarter of 2013-14 fiscal, while revenue rose by 7.9 per cent to $ 2.09 billion. For FY 2014, net profit grew 1.5 per cent to $ 1.75 billion, while revenue was up 11.5 per cent to $ 8.2 billion over 2012-13 financial year.
Infosys and its subsidiaries added 50 clients during the quarter and 238 during the year, the company said. Its liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds stood at Rs 30,251 crore in Q4 FY14. This is against Rs 27,440 crore in the previous quarter (October-December) and Rs 23,958 crore in Q4 FY 13.
Sequentially, company's net profit was up 4.1 per cent from Rs 2,875 crore in the October-December, 2013 quarter, while revenue was lower by 1.2 per cent from Rs 13,026 crore. For FY 2014, the net profit was up 13 per cent at Rs 10,648 crore and revenue grew 24.2 per cent to Rs 50,133 crore.
North America accounted for 59.8 per cent of the revenues while Europe accounted for 25.2 per cent. Indian markets contributed 2.6 per cent to the total revenue while the reaming 12.4 per cent came of other countries. Infosys added 10,997 employees (gross) in the last quarter of FY 2014 and 39,985 employees during the entire fiscal to take the total headcount to 1,60,405.
"Our cash and cash equivalents crossed Rs 30,000 crore during the quarter. We have increased the dividend payout ratio to up to 40 per cent of post-tax profits effective FY'14 to enhance returns for our shareholders," Infosys CFO Rajiv Bansal said.
Talking about the company's deal pipeline, Shibulal said, "Deal pipeline has marginally improved quarter on quarter." He further added, "large outsourcing deals we have closed four this quarter which are in $ 100 million total contract value, which takes long incubation time."
Infosys, which has been losing market share to industry peers in recent years, brought back N R Narayana Murthy from retirement in June last year to revive the company's sagging fortunes.
Once a poster boy for the $ 110-billion Indian IT-BPO sector, Infosys has been battling top level exits, which analysts have raised concerns about. Over the last two years, Infosys has seen nine top level exits including leaders who were tipped to be in fray for the top job.
Former company's America head Ashok Vemuri quit to become CEO at iGate, while CFO V Balakrishnan joined political party AAP. Other exits include global sales head Basab Pradhan, Head of Utilities and Resources for North America Stephen Pratt, Head of BPO sales, Australia, Kartik Jayaraman and BPO Head, latin America, Humberto Andrade.
While some attributed the exits to the return of Murthy at the helm of affairs, the company has maintained that it remains unperturbed by these exits. Infosys has also initiated the process of looking for Shibulal's successor, who will step down as the company's CEO in January 2015, ahead of his due retirement date in March.