Infy cuts $ revenue forecast, queers the earnings pitchhttps://indianexpress.com/article/business/business-others/infy-cuts-revenue-forecast-queers-the-earnings-pitch/

Infy cuts $ revenue forecast, queers the earnings pitch

Despite Q2 profit Rising 9.8%; firm’s stock dips 3.88%; CFO Rajiv Bansal quits.

Infosys Ltd on Monday posted a 9.8 per cent growth in net profit at Rs 3,398 crore for the quarter ended September 2015 as against Rs 3,096 crore in the same period of last year. However, the company’s shares fell by 3.88 per cent as the market gave thumbs down to the 2 basis point reduction in revenue guidance for the year and news of the exit of the firm’s chief financial officer Rajiv Bansal.

Infosys share plunged 7.91 per cent from the intra-day high of Rs 1,219 to Rs 1,122.50 on the BSE.

The company clocked a 17.2 per cent rise in revenue at Rs 15,635 crore, the best in nearly four years, from Rs 13,342 crore in the same period of last year. On a quarter-on-quarter basis, net profit rose by 12.1 per cent and revenue by 8.9 per cent from the June quarter.

In dollar terms, Infosys clocked $2,392 million in revenue for the quarter September 2015, a growth of 6 per cent over the first quarter of the current fiscal and 8.7 per cent over the corresponding period last year.

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“Q2 revenue was the highest in last 16 quarters,’’ Infosys said. The net profit was $519 million for the quarter a sequential growth of 9.1 per cent.

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“While results in any one quarter are transitory snapshots of a long journey, we do see our focused execution along our strategy starting to produce encouraging results for our clients, shareholders and Infoscions,” Infosys CEO and MD Vishal Sikka said.

The company, however, scaled down its annual revenue growth projection for the year in dollar terms keeping factors like currency volatility and toughness in business in the second half of the fiscal. The company has projected revenue growth for the year in the range of 6.4 per cent to 8.4 per cent in US dollar terms but insisted that there was no change in guidance in constant currency terms where it remains in the 10-12 per cent range as forecast at the start of the year.

“I have said this so many times today (Monday) — there is no change in guidance in constant currency terms,’’ Sikka said as Infosys stocks tumbled during the day over the lower revenue projection. The IT index plunged 2.02 per cent.

“The reported guidance change is only because of the currency. We have talked about a $20 million revenue loss just in translation. If you extrapolate this to each quarter it is a $60 to $65 million loss in translation for the year. This is why the 7.2 per cent guidance has come down to 6.4 per cent and 9.4 per cent has come down to 8.4 per cent,’’ Infosys’ exiting CFO Rajiv Bansal said.

The exit of Bansal who has been the Infosys CFO for the last three years was announced by Sikka in the course of the announcement of quarterly results on Monday. Sikka said Bansal’s exit as CFO was the result of natural transitions that occur in the course of the existence a large company like Infosys. “We will miss him even as we respect his decision,’’ Infosys CEO Sikka said on the exit of Bansal.

An Infosys veteran of 15 years MD Ranganath will take over from Tuesday as the CFO. Ranganath is executive vice president and head of strategic operations, responsible for strategic planning, risk management, mergers and acquisitions and corporate marketing at Infosys. “Over the course of the last 16 months, I have come to know Ranga as a passionate leader and a balanced leader with tremendous ability, knowledge and integrity,’’ Sikka said on the new CFO.