Infosys Unleashed Q1 Results

Infosys announced its earnings for the April-June quarter. Net profit came in at Rs.3,612 crore, missing analysts' estimates. Analysts had on average expected a net profit of Rs. 3,740 crore, according to Thomson Reuters data. With that, Infosys became the second large cap IT company to report its Q1 results.

The software services exporter kept its revenue growth projection unchanged at 6-8 per cent for the current financial year. The Q1 report card was the second under CEO Salil Parekh, who assumed charge in January this year. Infosys had posted a net profit of Rs. 3,690 crore over revenue from operations of Rs.18,083 crore in the previous quarter. Infosys announced a 1:1 bonus, subject to regulatory and shareholder approvals.

“The strong revenue and margin performance in this quarter shows that our dual emphasis on Agile Digital and AI-driven Core services is resonating with our clients”, said Salil Parekh, CEO and MD. of Infosys, “With our Agile Digital business growing sequentially at 8% in constant currency and increase in our large deal wins to over US$ 1 billion, we see good traction in the market.”

“Our emphasis on deepening client relationships resulted in strong client metrics including increase in the number of $100 million+ clients to 24”, said U B Pravin Rao, COO. “Utilization excluding trainees reached an all-time high of 85.7%.”

“We had broad-based financial performance on multiple fronts - RoE crossed 25%, Free cash flow was up 32% quarter on quarter and operating margins were at the upper quartile of our margin guidance”, said M.D. Ranganath, CFO. “While we continue to make strategic investments to leverage the opportunities in Digital, our relentless focus on operational efficiencies continued in this quarter.”

Digital revenues at $803 million (28.4% of total revenues), sequential growth of 8.0% and year-on-year growth of 25.6% in constant currency terms

• 1:1 bonus issue of equity shares and 1:1 stock dividend of American Depositary Shares
• Q1 19 revenues grew year-on-year by 12.0% in INR terms; 6.0% in constant currency terms

·         Q1 19 revenues grew sequentially by 5.8% in INR terms; 2.3% in constant currency terms

1. Financial Highlights

Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended June 30, 2018. Revenues were `19,128 crore for the quarter ended June 30, 2018 YoY growth of 12.0%; QoQ growth of 5.8%

• Net profit was `3,612 crore for the quarter ended June 30, 2018, including impact of `270 crore on account of reduction in the fair value of Assets held for sale
• YoY growth of 3.7%; QoQ decline of 2.1%
• Basic EPS at `16.62 for the quarter ended June 30, 2018, including impact of `1.24 on account of reduction in the fair value of Assets held for sale
• YoY growth of 9.1%; QoQ decline of 2.1%