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Infosys Q4 net profit up 25pc; gives subdued FY’15 revenue guidance

InfosysIT services giant Infosys on Tuesday reported a 25 per cent jump in its consolidated net profit for the quarter ended March 31, 2014, helped by large deals and an uptick in client spending.

The Bangalore-based firm posted a consolidated net profit at Rs. 2,992 crore for the fourth quarter of last fiscal from Rs. 2,394 crore in the year-ago period.

Revenue for the reported quarter rose 23.2 per cent to Rs. 12,875 crore from Rs. 10,454 crore.

However, the country’s second largest software services exporter 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.

Reacting to the results, Infosys opened the day on a positive note and gained 4 per cent to Rs. 3,371.80 at the BSE. However, by 11:30 AM the scrips lost their initial gains and were trading at Rs. 3,286.40 apiece, up by 1.50 per cent.

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. That’s how we see things today.”

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 2014 has been disappointing.
In US dollar terms, Infosys’ profit grew 9.7 per cent to USD 487 million in January-March quarter of 2013-14 fiscal, while revenue rose by 7.9 per cent to USD 2.09 billion.

For FY 2014, net profit grew 1.5 per cent to USD 1.75 billion, while revenue was up 11.5 per cent to USD 8.2 billion over 2012-13 financial year.

Sequentially, Infosys’s net profit was up 4.1 percent from Rs 2,875 crore in the October-December, 2013 quarter, while revenue was lower by 1.2 percent 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, Europe (25.2 per cent), India (2.6 per cent) and Rest of the World (12.4 per cent)

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.

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 FY’14.

This is against Rs 27,440 crore in the previous quarter (October-December) and Rs 23,958 crore in Q4 FY 2013.

It has also decided to increase the dividend pay-out ratio to up to 40 percent of post-tax profits effective fiscal 2014 from the earlier practice of up to 30 percent of post-tax profits.

“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.

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