Infosys net rises 2.4%; to sell two units

Infosys, India’s second-largest software exporter, on Friday announced that its net profit for the fourth quarter rose 2.4% to ₹3,690 crore year-on-year and the New York Stock Exchange-listed firm has put on sale two of its subsidiaries, one of which was at the centre of a dispute between the former board and founders.

The Bengaluru-based company forecast revenue to grow between 6-8% in constant currency in the current financial year.

Digital revenue accounted for 25.5% of the total revenue for the fiscal ending March 2018. It grew 3.6% sequentially in constant currency terms in the fourth quarter.

“’Navigating Your Next’ is our aspiration of how we will partner with each one of our clients.” said CEO Salil Parekh. “We will execute our strategy around the four pillars of scaling our agile digital business which is today $2.79 billion in revenue, energising our client’s core technology landscape via AI and automation, reskilling our employees, and expanding our localisation in markets such as U.S., Europe and Australia.”

Sequentially, net profit declined 28.1%, according to a company statement. The Q3 net profit included a positive impact of ₹1,432 crore on account of a conclusion of an Advanced Pricing Agreement with the U.S. IRS.

Revenue grew 3% to ₹70,522 crore for the year ended March year-on-year, while it rose 5.6% to ₹18,083 crore during the fourth quarter. Operating margin guidance was in the range of 22-24%, he said. The Bengaluru-based company, which faced a spat between its founders and the board during the last financial year, reported that its full-year net profit rose 11.7% to ₹16,029 crore.

Mr. Parekh, CEO and MD of the company, took charge from interim CEO U.B. Pravin Rao on January 2. He is the second non-promoter CEO of the company after Vishal Sikka, who resigned on August 18 after the founders accused the board of poor corporate governance.

Panaya write down

Infosys has initiated an identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava, and Panaya, according to the statement. The company anticipates completion of the sale by March 2019. “The corresponding write down in the investment value of Panaya in the standalone financial statements of Infosys Ltd. is ₹589 crore.”

It has also entered into an  agreement to acquire WongDoody Holding Company, a U.S.-based digital creative and consumer insights agency for up to $75 million, the statement added.