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Infosys reports 12% decline in Q3 profit, announces Rs 8,260-crore share buyback

Net profit during the period declined 12.1% sequentially to Rs 3,610 crore.

The country’s second largest software services exporter, Infosys, on Friday posted its October-December earnings which were lower than analysts’ estimates as subdued growth in services and cautious spending by clients created pressure. Still, the company raised its revenue growth forecast for FY19 to 8.5-9% in constant currency, from 6-8% previously.

Infosys also approved a buyback of shares worth Rs 8,260 crore at a price not exceeding Rs 800 per share, which is at a 17% premium to its current market price of Rs 683.50. It also announced a special dividend of Rs 4 per share that would be a payout of approximately Rs 2,107 crore.

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Net profit during the period declined 12.1% sequentially to Rs 3,610 crore. Rupee revenue grew by 3.8% on a quarter-on-quarter basis to Rs 21,400 crore. Revenue in dollar terms rose 2.3% to $2,987 million. Digital revenues at $942 million (31.5% of total revenues) grew 5% sequentially in constant currency terms.

Operating margin fell 110 basis points to 22.6%, the lowest in 10 quarters, which Infosys interim CFO Jayesh Sanghrajka attributed to acquisitions, investments, localisation, increased compensation and additional depreciation and amortisation impact of 0.4% due to reclassification of assets of Panaya and Skava.

Earnings before interest and taxes stood at Rs 4,830 crore during the quarter.

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Infosys CEO and MD Salil Parekh said: “With increased client relevance, we saw a 10.1% year-on-year growth in Q3 on a constant currency basis. We also had another strong quarter in our digital business with 33.1% growth and large deals at $1.57 billion.”

The company’s utilisation, including trainees, fell 0.4% to 79.8%. Infosys COO UB Pravin Rao said the previous utilisation rates were not sustainable and the current levels are planned and the company is comfortable with them.

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Based on the recommendation of the nomination and remuneration committee, the board considered and approved the reappointment of Kiran Mazumdar Shaw as the lead independent director for the second term from April 1, 2019, to March 22, 2023, subject to shareholders’ approval.

“I am delighted that the Infosys board of directors has unanimously recommended Kiran Mazumdar-Shaw for reappointment as the lead independent director,” Nandan Nilekani, chairman of the board said.

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Source: Financial Express