Infosys profit up 5% in Q1; raises revenue guidance for FY16

Infosys Ltd on Tuesday reported better than expected 5 per cent rise in June quarter net profit and raised its full-year sales growth forecast as business revamp helped it win more IT contracts.

The nation's second-largest outsourcing company reported consolidated net profit of Rs 3,030 crore, or Rs 13.26 per share, in the April-June quarter as against Rs 2,886 crore, or Rs 12.63 per share in the same period a year ago.

Infosys added 79 clients in the April-June quarter, winning contracts from companies including UK department store chain House of Fraser and UAE-based Sharjah Islamic Bank. Six deals were worth more than USD 50 million in value each.

Infosys shares soared 11 per cent, the biggest intra-day jump in two yeas, to close at Rs 1,112.65 on the BSE.

The consolidated revenue grew 12.4 per cent in the first quarter of the current fiscal to Rs 14,354 crore, from Rs 12,770 crore in April-June of 2014-15.

"Our efforts in redesigning our clients' experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients," Infosys CEO and Managing Director Vishal Sikka said.

Dipen Shah, Head of Private Client Group Research at Kotak Securities said Infosys' results beat its estimates on the revenue front.

"The highlight of the results was the strong constant currency revenue growth of 4.4 per cent, led by volume growth of 5.4 per cent. The volume growth was the best in the past 19 quarters," he said. 

Infosys added 79 clients in the April-June quarter of the current fiscal, signing six large deals with a total contract value of USD 688 million. Its volume growth stood at 5.4 per cent.

The company added 3,336 employees, taking its headcount to 1,79,523 employees as on June 30, 2015. Its attrition rate was at 14.2 per cent for the said quarter, down significantly from 23.4 per cent a year earlier.

On acquisitions, Sikka re-iterated that the company is looking at buying small companies working on innovative technologies.

"We are very confident of our organic strategy, which we want to compliment with select acquisitions of great companies as we see them... (We aspire that) by 2020, USD 1.5 billion out of USD 20 billion coming from acquisitions," Sikka said.

Infosys expects USD 1.5 billion to come from new acquisitions, USD 2 billion from new technologies and the remaining USD 16.5 billion from the traditional business.

"We had expected to reach industry-leading growth by mid next year. We are on track for that," he said.

For the entire 2014-15 fiscal, Infosys had clocked revenue of USD 8.71 billion.

Liquid assets, including cash and cash equivalents, available-for-sale financial assets and government bonds, were Rs 30,235 crore in the quarter under review compared to Rs 32,585 crore as on March 31, 2015.

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