Infosys Q2 net up 24.29% at Rs 2,369 crore; guidance disappoints
Bangalore: Software services major Infosys on Friday posted 24.3 percent jump in consolidated net profit at Rs 2,369 crore for the July-September quarter, but its guidance disappointed the market pulling down the scrip by about 8 percent.
Citing global economic uncertainties, Infosys lowered its revenue growth guidance for the current financial year to 17.3 percent setting off alarm bells.
The company's net profit was Rs 1,906 crore for the same quarter last fiscal (2011-12).
Infosys said in a statement that its revenues were up 21.7 percent at Rs 9,858 crore during the second quarter, from Rs 8,099 crore in the year-ago period.
Infosys, which has undergone a slew of management changes in the last one year, said V Balakrishnan will give up his position as CFO from October 31.
"Global economic uncertainties continue to face the industry. We have increased employee wages, used some of our cash in a transformational acquisition of a consulting business and enhanced our investment in R&D and solutions," Infosys CEO and Managing Director S D Shibulal said.
These initiatives will position us well in the industry and provide a strong platform for future growth, he added.
Reacting to the results, the company's scrip tumbled 7.76 from yesterday's close to Rs 2,335 apiece on the BSE. It recovered a little, but was still down 5.6 percent at Rs 2,390.
"The result is in line with street expectations but weak guidance pulled down the scrip on the bourses," CNI Research CMD Kishore Ostwal said.
For the fiscal 2012-13, the company has lowered its rupee revenue guidance to be 'at least' Rs 39,582 crore (year-on- year growth of 17.3 percent), from Rs 40,364 crore estimated earlier.
Last quarter, Infosys had said it is suspending the practice of giving guidance citing "lack of clarity" in the demand environment, but had revised its forecast for FY'13 to be at least Rs 40,364 crore (year-on-year growth of 19.7 percent).
Considered IT industry bellwether, especially for its practice of providing revenue guidance, Infosys had been struggling to meet its forecast in the last few quarters, experts have said.
The company said it has increased employee wages, though the details were not available. It had deferred wage hike in April and said it would decide on the same in October.
Infosys and its subsidiaries added 10,420 employees (gross), while the net addition stood at 2,610, taking the total headcount to 1,53,761 employees as on September 30, 2012. It added 39 clients during the quarter.
In dollar terms, the company's net profit stood at USD 431 million (up 4.8 percent), while revenues were up 2.9 percent to USD 1.79 billion.
The company has maintained its dollar revenue forecast to be at least USD 7.34 billion (a growth of 5 percent y-o-y).
This is much lower than Nasscom's growth estimate of 11-14 percent for the industry in FY 2013.
TCS, the country's largest IT company, will report its July-September results on October 19, while HCL Technologies is due to announce its numbers on October 17. Traditionally the quarter is strong for software services firms.
Analysts were expecting Infosys to revise its revenue guidance upwards on the back of its USD 350 million acquisition last month of Swiss consultancy firm Lodestone.
Meanwhile, the company said its CFO and member of board V Balakrishnan will be giving up his position as CFO from October 31, after six years at the helm of the company's finances.
Rajiv Bansal, currently Vice President (Finance) will take over as CFO from November 1, the statement said.
Balakrishnan will continue as a member of the Board and will be responsible for three key businesses -- Infosys BPO, Finacle and the India Business Unit.
As on September 30, 2012, the company's cash and cash equivalents, including investments in available-for-sale financial assets, certificates of deposits and government bonds totalled Rs 22,570 crore (Rs 18,601 crore as on same date in 2011).
Infosys declared an interim dividend of Rs 15 per share.
"Our operating cash flows continue to be strong while our cash and cash equivalents crossed US 4 billion. We are focussed on high quality growth despite global currency and economic volatility," Balakrishnan said.