Infosys raises growth guidance to 8.5-9%, sticks to margin forecast

The company notched up revenues of $2.98 billion in October-December. Photo: Reuters

The company notched up revenues of $2.98 billion in October-December. Photo: Reuters

New Delhi: Infosys Ltd today revised its revenue guidance for 2018-19 upwards to 8.5%-9.0% from 6%-8% given in April last year. A leg-up in the company’s outlook for its revenues for the year came on the back of what its Chief Executive Officer and Managing Director Salil Parekh said was a strong pipeline. Deals wins in the quarter gone by and strong growth in “many of our segments” are behind Parikh’s optimism.

The company won $1.57 billion of large deals in the December quarter, the second consecutive three-month period of such wins after netting over $2 billion of orders during July-September. The company has won $4.7 billion in large deals in the three concluded quarters of the ongoing financial year.

“Many of our segments are growing well. We have a strong pipeline and deal wins. That’s giving us the confidence,” Parekh said in his comments on the results during a press conference.

The company notched up revenues of $2.98 billion in October-December, a growth of 2.7% in constant currency terms from the immediate previous quarter. This brought the company’s revenues for the first three quarters of the ongoing financial year to $8.74 billion. The company had closed the last financial year with $10.93 billion in revenues.

The Bengaluru-headquartered company retained its forecast for 22%-24% operating margin for the ongoing financial year. The company was held back on forecasting improved margins as well as the benchmark eroded by 110 basis points from the September quarter to 22.6%. This also hurt its profits that came at $502 million, shaving off 13.6% from the second quarter.

The company’s top management said de-classification of its subsidiaries Skava and Panaya as “held for sale” and its investment in building capacity for sales had hurt margins. One-offs like additional depreciation charge and acquisition expenses led to the margin suffering. The company had in September acquired Fluido. The Finnish company is a consulting partner of Salesforce, the US-based giant that provides cloud-based software services for customer relationship management.

First Published: Fri, Jan 11 2019. 06 48 PM IST

Source: Livemint