India’s second largest software services exporter Infosys said it has reported highest quarterly revenue growth in four years but saw its share price come under pressure as the firm cut the US dollar revenue guidance for the year.
The firm posted 6 per cent rise in sequential US dollar revenues to $2.39 billion with constant currency growth pegged at 6.9 per cent and 8.9 per cent rise revenues in rupee terms to Rs 15,635 crore compared to the three months ended June 30, 2015.
Year-on-year growth last quarter in terms of constant currency was 14.2 per cent year, while dollar terms growth was 8.7 per cent and in the local currency it sported a robust 17.2 per cent rise partly boosted by depreciation of Indian rupee.
Infosys clocked $519 million net profit in July-September quarter, which represented 9.1 per cent quarter on quarter and 1.6 per cent year on year growth.
In rupee terms, net profit grew 12.1 per cent quarter on quarter and 12.1 per cent year on year to Rs 3,398 crore.
Once industry bellwether, Infosys has struggled to maintain pace with the overall IT industry growth for the past few years and embarked on a turnaround initiative under Vishal Sikka, the first non-founder CEO who joined the company in July last year. The firm’s performance in the last two quarters seems to suggest that its strategy is working.
However, the markets have not taken kindly to the company lowering its full year top line growth in dollar terms to 6.4-8.4 per cent from earlier projection of 7.2-9.2 per cent range. The firm had previously upped the dollar terms guidance for FY16 from 6.2-8.2 per cent at the end of first quarter.
Infosys scrip was trading at Rs 1,141.3 a share on the BSE at 1.53 PM in a flat Mumbai market on Monday.
The company has, however, maintained its revenue guidance in constant currency basis at 10-12 per cent.
Infosys said it signed five large deals with a total contract value of $983 million in the just ended quarter and added 82 clients with total number of clients crossing 1,000.
Meanwhile, the company has announced the resignation of chief financial officer Rajiv Bansal which comes to effect on Monday. He will be replaced by M D Ranganath at the close of business October 12, 2015. A 15 year Infosys veteran, Ranganath is currently head of strategic operations. Bansal will continue as an advisor to the CEO and the board through December 31, 2015.
Talking about the results, MD & CEO Sikka said: “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.”
Growth is driven by recent initiatives such as service differentiation, improvement in client mining and higher focus on winning large deals, according to chief operating officer UB Pravin Rao.
The company highlighted a three year contract with TOMS Shoes, a contract with ABB, a $210 million deal to build a goods and service tax network system for an Indian non-profit private limited company, contracts from ATP, Saks Fifth Avenue etc as major deal wins last quarter.