Infosys Q2 net up 6.1% at Rs 3,606 cr; cuts FY17 rev guidance

IT major Infosys today posted a 6.1 per cent rise in consolidated net profit at Rs 3,606 crore for the September quarter and slashed its revenue guidance for the second time this year due to its recent performance and "near-term uncertain business outlook".

The Bengaluru-based firm had reported a net profit of Rs 3,398 crore in the year-ago period, it said in a BSE filing.

The consolidated revenue for the quarter was up 10.7 per cent at Rs 17,310 crore, from Rs 15,635 crore in July- September 2015. The figures are as per Indian Accounting Standard (Ind AS).

Revenues are now expected to grow 8-9 per cent in constant currency, translating to 9.2-10.2 per cent in INR terms and 8.2-9.2 per cent in USD terms.

This is the second time the company has reduced its revenue guidance for the fiscal. In July, Infosys had said it expected revenues to grow 10.5-12 per cent in constant currency terms, lower than the previously estimated 11.5-13.5 per cent for the full year 2016-17.

"While we continue to navigate an uncertain external environment, we remain focused on executing our strategy and increasing momentum of our software plus services model. Considering our performance in the first half of the year and the near-term uncertain business outlook, we are revising our revenue guidance," Infosys CEO Vishal Sikka said.

He added that in the long term, it's increasingly clear that the IT industry's future lies in evolving from a cost-based, people-only model, to one in which people are amplified by software and artificial intelligence (AI).

The company's operating margins expanded 80 basis points sequentially to 24.9 per cent.

"Our margins expanded during the quarter on the back of further improvement in operational efficiency. Operating cash flows for the quarter were healthy and we effectively navigated a volatile currency environment through prudent hedging," Infosys CFO MD Ranganath said.

In US dollar terms, its consolidated net profit rose 3.8 per cent to USD 539 million in the September quarter of 2016-17, while revenue went up 8.2 per cent to USD 2.5 billion.

Infosys shares were trading at Rs 1,028.20 apiece, down 2.27 per cent from the previous close on the BSE.