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India's second biggest outsourcer Infosys announced its June quarter (Q1) earnings earlier in the day. The Bengaluru-based IT company's net profit came in at Rs 3,483 crore compared with Rs 3,603 crore during the previous quarter, down 3.3 per cent. The company's revenues came in at Rs 17,078 crore against Rs 17,120 crore in the March quarter. Infosys earnings came in better than the Street's estimates as analysts at Morgan Stanley had expected Infosys to report net profit of Rs 3,334 crore.
Here are the key highlights of Infosys Q1 earnings:
#InfosysQ1FY18 Utilization excluding trainees at 84%, improvement of 200 bps QoQ https://t.co/lfW51FG8zq
- Infosys (@Infosys) July 14, 2017
Will continue to compete for our fair share of large deals, says Infosys COO UB Pravin Rao.
Rupee appreciation impacted revenues by 80 basis points, says Vishal Sikka.
Planning to hire 2,000 people in Indiana and 2,000 in North Carolina in US, says CEO Vishal Sikka.
Announced healthy variable pay hikes across verticals, says Infosys CFO M. D. Ranganath.
Vishal Sikka, CEO of Infosys in a tweet said, "Really proud of our team's strong execution and great performance in Q1."
Really proud of our team's strong execution and great performance in Q1... @Infosys
- Vishal Sikka (@vsikka) July 14, 2017
An autonomous vehicle for me & Pravin, built right in Mysore @Infosys Engg Services!
- Vishal Sikka (@vsikka) July 14, 2017
Who says we can't build transformative technologies? pic.twitter.com/71qEA2y5vJ
#InfosysQ1FY18 Vertical Metrics: MFG & Hi-Tech grew by 2.0% sequentially; and 1.5% in constant currency https://t.co/lfW51FoxaQ
- Infosys (@Infosys) July 14, 2017
India's second biggest IT services exporter Infosys today announced a better-than-expected net profit of Rs. 3,483 crore for the quarter ended June 30, 2017, helped by key client wins. Infosys revenues for the June quarter came in at Rs. 17,078 crore. Importantly, Infosys raised its dollar revenue guidance, cheering the markets. Global financial services major Morgan Stanley expected Infosys to post net profit of Rs. 3,335 crore on revenues of Rs. 17,119 crore in the June quarter. In the March quarter, Infosys had reported a net profit of Rs. 3,603 crore on revenues of Rs. 17,120 crore. Read
#InfosysQ1FY18 Vertical Metrics: FSI grew by 2.6% sequentially; and 2.0% in constant currency https://t.co/lfW51FoxaQ
- Infosys (@Infosys) July 14, 2017
#InfosysQ1FY18 North America grew by 1.3% sequentially; and 1.3% in constant currency https://t.co/lfW51FoxaQ
- Infosys (@Infosys) July 14, 2017
Infosys' financial highlights for Q1FY18
The dollar revenue of Infosys, which is widely tracked by analysts and investor community, grew 3.2 per cent in reported terms and 2.7 per cent in constant currency terms sequentially to $2,651 million.
"We had broad-based growth across geographical and industry segments. Our initiatives on operational discipline led to record levels of utilization and better realization during the quarter," said U B Pravin Rao, COO. "Our new services and software offerings are helping us strengthen our positioning in the market."
"In Q1, we continued to help clients drive automation and innovation into the core of their businesses leveraging our renewed traditional services, our new services in areas such as Cloud Ecosystem, Big Data and Analytics, API and Micro Services, Data and Mainframe Modernization, Cyber Security and IoT Engineering Services, and our software-led offerings, especially our next-generation Artificial Intelligence (AI) Platform Nia," Infosys said in a press release.
#InfosysQ1FY18 Europe grew by 4.7% sequentially; and 3.1% in constant currency https://t.co/lfW51FoxaQ
- Infosys (@Infosys) July 14, 2017
#InfosysQ1FY18 Rest of the world grew by 7.3% sequentially; and 6.9% in constant currency https://t.co/lfW51FoxaQ
- Infosys (@Infosys) July 14, 2017
Infosys' operating profit came in at Rs 4,111 crore for the quarter ended June 30, 2017 (QoQ) decline of 2.4 per cent and YoY growth of 1.6 per cent.
Infosys Q1 operating margin came in at 24.1 per cent.
Infosys raised dollar revenue guidance to 7.1-9.1 per cent for the year, against its April forecast of 6.1-8.1 per cent. Markets cheered Infosys earnings with the stock rising over 2 per cent as compared to flat broader market.
"Our relentless focus on strong cash generation led to a healthy operating cash flow. Further, our continued emphasis on operational efficiencies enabled us to mitigate the impact of margin headwinds during the quarter," said M. D. Ranganath, CFO. "We successfully navigated yet another quarter of significant currency volatility through our hedging."
India's second biggest IT services exporter Infosys today announced a better-than-expected net profit of Rs. 3,483 crore for the quarter ended June 30, 2017, down 3 per cent from Rs. 3,603 crore reported in the March quarter. Infosys revenues for the June quarter came in at Rs. 17,078 crore, against Rs. 17,120 crore reported in the March quarter. Global financial services major Morgan Stanley expected Infosys to post net profit of Rs. 3,335 crore on revenues of Rs. 17,120 crore in the June quarter.
"Our persistent focus on execution in Q1 is reflected in broad-based performance on multiple fronts- revenue growth, resilient margins despite multiple headwinds, healthy cash generation and overall business results. I am encouraged by the uptick in revenue per employee for six quarters in a row, and the strong momentum in our new high growth services and software, as we accelerate our focus on innovation-led growth." said Dr. Vishal Sikka, CEO of Infosys.
Infosys Ltd is re-evaluating its long-term targets because tougher market conditions have made them appear "daunting", the company's chairman said last month. Infosys Chief Executive Officer Vishal Sikka had said earlier that the IT services company was likely to struggle to reach its ambitious $20 billion revenue target by 2020 due to a challenging market environment.
Revenues in the financial year 2017 came in at Rs 68,484 crore, up 9.7 per cent on an annual basis.
For financial year 2017, the board of directors had announced a final dividend of Rs 14.75 per share amounting to Rs 4,078 crore.
Infosys shares has underperformed the benchmark indices so far this year, as the stock has fallen 3.31 per cent compared with a gain of 21 per cent in the Nifty amid growth concerns.
Infosys had reported a net profit of Rs 3,603 crore on revenues of Rs 17,120 crore.
Infosys management had guided for revenue growth of 6.5-8.5 per cent in constant currency term for the current financial year. While, operating margin guidance is expected in range of 23-25 per cent for FY18.
Infosys in the last financial year (FY17) reported that its revenues crossed $10 billion. FY17 revenues grew 9.7% to Rs 68,484 crore in rupee terms and 8.3 per cent in constant currency terms. Its operating margin in FY17 stood at at 24.7 per cent compared to 25.0 per cent in FY16.
India's biggest IT services firm TCS on Thursday reported a net profit of Rs. 5,945 crore in the April-June quarter on revenues of Rs. 29,584 crore. Hurt by volatile currencies, TCS' net profit fell 10 per cent compared to the March quarter. TCS had reported net profit of Rs. 6,608 crore on revenues of Rs. 29,642 crore in the March quarter. Global brokerage Morgan Stanley expected TCS to report net profit of Rs. 5,999 crore on revenue of Rs. 29,797 crore in the June quarter.
#InfosysQ1FY18 Management commentary is expected to begin at 10:30 AM IST. Watch it live here: https://t.co/WoEjI3186b
- Infosys (@Infosys) July 14, 2017
The India's second biggest outsourcer is expected to announce net profit of Rs 3,334 crore on sales of Rs 17,119.8 crore and EBITDA or operating profit is expected to come in at Rs 4,453 crore as estimated by a report published by Morgan Stanley.
Besides growth guidance, here are other five things that needs to be watched in Infosys Q1 earnings, according to domestic brokerage Edelweiss Securities: 1) growth guidance and revenue growth traction of digital services; 2) management commentaries on clients budgets; 3) growth in key verticals, such as, BFSI, manufacturing, retail, healthcare, etc; 4) pace of local hiring due to expected changes in visa regime; and 5) pace of commoditisation of legacy business and impact of same on demand outlook.
