Infosys posts 1.4% rise in net amid high labour costs, currency volatility

AI and cloud computing contribute 50% of the $2 bn revenue growth in last 2 years: CEO Vishal Sikka

By: Express News Service | Bengaluru | Published: July 15, 2017 2:03 am
Infosys CEO Vishal Sikka arrives in an autonomous golf cart at the company’s Bengaluru campus for the announcement of June quarter results. Source: @vsikka Twitter handle

Infosys Ltd on Friday posted a marginal 1.4 per cent increase in net profit at Rs 3,483 crore for the quarter ended June 2017 as against Rs 3,436 crore in the same period of last year amid high labour costs and currency volatility. The firm, however, showed a 3.3 per cent dip in net profit from the March 2017 quarter. The company reported a rupee revenue of Rs 17,078 crore for Q1, a rise of 1.8 per cent from Rs 16,782 crore in the same period of last year and a decline of 0.2 per cent from the March quarter. TCS had posted a 5.9 per cent fall in net profit for the June quarter on Thursday.

New IT service offerings like artificial intelligence and cloud computing contributed 50 per cent of the $2 billion revenue growth by the company in the last two years, Infosys CEO Vishal Sikka said here while unveiling the company’s performance in the first quarter of the 2018 fiscal year.

In dollar terms, Infosys clocked a revenue of $2,651 million for Q1, recording a 3.2 per cent growth over the last quarter and a year on year growth of 6 per cent. The net profit for the period was $541 million, a quarterly decline of 0.4 per cent and a 5.8 per cent growth over last year. “In the previous quarter, we had spoken of putting a strong focus on execution and I am really happy to see that we have been able to deliver that. The results are reflected in our performance. We saw 3.2 per cent revenue growth on a reported basis. We had good margin performance of 24.1 per cent despite many margin pressures and I am very happy about that,’’ said Sikka.

The company has projected a revenue growth of 6.5 per cent to 8.5 per cent in the current fiscal year. “For six quarters in a row we have grown our revenue per employee and it is now just a whisker below $52,000 and this has come on the basis of strong utiliisation. Our utilisation crossed 84 per cent overall including freshers it is 80.2 per cent which is the highest level in 15 years,’’ he said. The areas of focus for the company like AI and cloud computing had started yielding results and would be the future growth engines for the firm, he said.

“There are six categories of new services in the cloud, AI centric area. I am very proud to report that compared to two years ago when these services did not exist we have seen strong growth. Going forward, we will obviously count on growth from these services. In the last two years roughly $2 billion revenue growth has come and half of that has been from these services,’’ Sikka said. The new high growth services had contributed 8.3 per cent to overall revenue and new software has contributed 1.6 per cent to revenue, he said.

Sikka said that he was “not at all” disappointed by Prime Minister Narendra Modi not raising with the US President Donald Trump about the issue of emerging curbs on H-1B visas which help Indian techies work in the US on projects awarded to outsourcing firms. “All of this points to one underlying reality. It is not so much about the visas but as it is about innovation, about the changing nature of work force, about the changing nature of priorities of businesses at this time,’’ Sikka said.

In self-driving modeSending out a message of Infosys focus on new technologies, CEO Vishal Sikka and COO Pravin Rao arrived to make the announcement about the company’s financial results in an autonomous golf cart driven (self-driving) by technology developed by the company at the Bengaluru campus. “The going rate for autonomous car engineers is several million dollars. We decided to create a program to train engineers in autonomous tech at Mysore. This is more a mechanism to teach our engineers and a symbol that we can be at the cutting edge of technologies,’’ Sikka said.

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