Continuing its recent run of good financial performances, IT major Infosys on Friday beat market estimates with a 16.2 per cent increase in net profit at Rs 3,597 crore for the quarter ended March 2016 as against Rs 3,097 crore in the year-ago period.
The firm’s revenues jumped 23.4 per cent to Rs 16,550 crore for the quarter as against Rs 13,411 crore a year ago. The tech bluechip’s quarter-on-quarter net profit rose 3.8 per cent and revenue 4.1 per cent from the December quarter. Its net profit for the full fiscal was up 9.4 per cent to Rs 13,491 crore.
The company has set a target of achieving revenues of $20 billion by 2021 and projected a revenue growth in the range of 11.5 per cent to 13.5 per cent in constant currency terms in the 2016-17 fiscal. Revenues are expected to grow 12.7-14.7 per cent in rupee terms based on the exchange rates as of March 2016.
“We had a great performance in the large deals area. We did about $ 757 million worth of large deals (six deals in all) and this does not include two large frame deals. If you look at the year we had significantly higher big deals. We had $ 1.9 billion worth large deals in 2014-15 and in 2015-16 we did more than $2.7 billion. That is a good pace for the future,’’ Infosys CEO Vishal Sikka said. The company has targeted winning large deals worth at least $ 450 million every quarter.
“We are quite happy with our performance. The initiatives that we have started around renewing our existing services using automation and grassroots innovation in everything we do has been adopted very well. We had a great performance in automation. In the last quarter we had the equivalent of 1700 efforts saved because of automation. Design thinking has become an integral part of the work that we do,’’ Sikka said while attributing reasons for the strong performance. The board of directors recommended a final dividend of Rs 14.25 per share for FY16.
“Our goal is to get revenues of $16.5 billion through renewal of our existing businesses, two billion through new services and $ 1.5 billion through inorganics. Every day that goes by I continue to feel comfortable that we will get there,’’ Infosys CEO said.
The company also reported reduction in attrition rates and a consistent utilisation of employee rate in the range of 80 per cent through the 2015-16 fiscal year.
According to analysts, Infosys FY2017 constant currency revenue guidance at 11.5-13.5 per cent has come ahead of expectations along with 90 bps margin beat in Q4 of FY16. “Infosys guidance reassures street that the company is back to industry leading growth trajectory (FY16 revenue growth of 13.3 per cent and volume growth of 14.5 per cent year-on-year),” said Govind Agarwal, Research Analyst, Prabhudas Lilladher.
“Employee attrition reduced further in Q4, and is reflective of increased engagement with our people all through the year, and our steps to make Infosys an exciting place for the world’s best talent. We continue to reimagine our internal processes to increase organizational agility.” said U B Pravin Rao, COO. “The momentum of large deal wins continued this quarter and bookings were strong.”