IT giant Infosys beat analysts’ expectations with a 28.6 per cent rise in net profit for the quarter ended September 30 to Rs 3,096 crore with revenues rising 2.9 per cent to Rs 13,342 crore in the same period, which saw investors buoy its share price around 6 per cent in early morning trades on Friday.
Sequentially, Infosys’ revenues rose 4.5 per cent while net profit increased 7.3 per cent over the first quarter ended June 30, 2014.
In the first earnings announcement under the leadership of new CEO Vishal Sikka, Infosys maintained its full revenue growth guidance of 6.7-8.7 per cent but showered interim dividend of Rs 30 a share while announcing the first bonus issue since 2006 in the ratio of 1:1.
“Digital transformation is reshaping the business of every one of our clients. We see this as a great opportunity to help them renew the core of their business as well as to expand into new frontiers and are seeing early positive results,” Sikka, CEO and managing director of Infosys, said.
“On several fronts, our efforts to bring in operational efficiencies yielded encouraging results during the quarter. We have seen positive results of some of our interventions on sales, margins and attrition, and we will continue to focus on these areas,” said U B Pravin Rao, COO.
Rajiv Bansal, CFO, added, “We have been able to improve our margins during the quarter and feel confident of sustaining these within a narrow band. This is giving us increased confidence to make the investments required to meet our growth aspirations.”
From an operations perspective, the company saw attrition rate rise to a high of 20.1 per cent.
Liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds swelled to Rs 33,616 crore as on September 30, 2014 as compared to Rs 29,748 crore as on June 30, 2014.
The company said co-founder N R Narayana Murthy will cease to be non-executive chairman effective October 10 and to avoid any perceived conflicts, it would not be appropriate for him to be the chairman emeritus of Infosys.
S Gopalakrishnan will also cease to be the non-executive vice chairman effective Friday and with these two remitting office, the founders have neither association with the company nor exercise any control over the affairs of the company henceforth.
The founders have therefore requested the company to seek appropriate classification of their revised status. The firm is seeking regulatory guidance on the same.
The company has been classifying its co-founders, N R Narayana Murthy, Nandan Nilekani, S Gopalakrishnan, S D Shibulal and K Dinesh along with their immediate family members as promoters/promoter group of the company.
As a parallel development, K V Kamath has been elected as chairman of the board effective October 11, 2014.
(Edited by Joby Puthuparampil Johnson)