India’s second-largest software exporter Infosys’ net profit rose 10.3% year-on-year to₹4,110 crore for the second quarter ended September as financial services and retail sectors showed bought in more revenue and the Bengaluru-based firm posted bigger client wins.
“We are delighted with our broad-based growth across all business segments and geographies during the quarter,” said Salil Parekh, CEO and managing director. “This is a testimony to our strong client relationships, digital led full-service capabilities, and intense focus on the needs of our clients.”
“Large deal wins at over $2 billion during the quarter demonstrate our increased client relevance and also give us better growth visibility for the near-term,” he said.
Rival Tata Consultancy Services, the country’s biggest software exporter’s had reported a 22.57% rise in net profit at ₹7,901 crore last week. Revenue for the quarter increased from ₹30,541 crore ₹36,854 crore. Wipro, the third largest software exporter, is slated to announce its results next week.
Digital revenues at $905 million accounted for 31% of total revenues, which grew 19.2% to ₹18,297 crore. Revenue from the financial sector grew from ₹1,1616 crore from ₹1,776 crore for the same period a year earlier while retail grew 29% to ₹1,776 crore.
Revenue guidance in constant currency for the full year was retained at between 6% and 8% and operating margin guidance was also maintained at between 22% and 24%.
“We had another quarter of solid operating parameters with utilisation being stable and offshore mix improving to an all-time high”, said U.B. Pravin Rao, chief operating officer. “Our digital services grew double digits sequentially, while growth in top clients was also robust.”
M.D. Ranganath, chief financial officer said: “Our unwavering focus on strong financial performance on multiple fronts continued to deliver results during the quarter. Operating margins for the quarter as well as for the half year was at 23.7%, near the top end of our guidance band.
“Operating cash flow was over $1 billion during the first half of the year and ROE was at 24.7%. We will continue to make strategic investments in digital to leverage opportunities and at the same time keep a sharp focus on key operational efficiency parameters,” said Mr. Ranganath, who stepped down as the CFO in August. He was the second CFO to resign in the last three years. Infosys announced that he would continue in his current role till November 16, 2018.
In October 2015, former CFO Rajiv Bansal, who opposed an acquisition of an Israeli firm, resigned after differences with the then management team. Mr. Bansal’s severance pay packet created a further divide between the management and the founders led by N.R. Narayana Murthy.
On September 17, 2018, an Arbitral Tribunal had communicated a decision to pay Mr. Bansal an outstanding amount of ₹12.17 crore “with regard to the dispute between Infosys Ltd. and its former CFO Mr. Rajiv Bansal”.
Infosys has received legal advice and will comply with the award and make the necessary payments, according to a company statement. The Company has allotted 2,18,41,91,490 fully paid up equity shares of face value ₹5 each during the three months ended September 30, 2018, after a bonus issue was approved by the shareholders through a postal ballot. “The bonus shares have been issued to celebrate 25th year of public listing in India and to further increase the liquidity of its shares.”