Infosys Q4 net up 25%, doles out 6-7% wage hike

Tags: News

Revenue crosses Rs 50,000 crore mark for the first time, up 11.5%

Infosys, India’s second largest software services exporter, has reported a better than market expected results, with a 4.1 per cent increase in consolidated net profit (Q-o-Q) at Rs 2,992 crore for the quarter ending March 31, 2014. The company’s revenue for the quarter, however, declined by 1.1 per cent to Rs 12, 875 crore, also on Q-o-Q basis.

For FY14, the company’s revenue jumped 24.2 per cent to Rs 50,133 crore, while net profit for the full year increased by 13 per cent to Rs 10,648 crore. This is the first time that the company’s revenue has crossed the Rs 50,000 crore mark.

In dollar terms, the net profit was $487 million, indicating a 5.2 per cent growth over the December quarter. The sales revenue stood at $2,092 million, a decline of 0.4 per cent over the previous quarter.

For FY14, the company’s revenue increased by 11.5 per cent at $8,249 million compared with the previous fiscal. The net profit, however, was up by 1.5 per cent to $1,751 million.

“I am pleased that we have been able to double our growth rate for the full year compared with last year, though performance in the last quarter of FY14 was disappointing,” said SD Shibulal, Infosys managing director & chief executive officer. “We have guided for a revenue growth of 7 to 9 per cent next year and remain firmly focused on building the growth momentum by making all the necessary investments in our business,” he said.

In spite of a strengthening rupee, the organisation’s fourth quarter operating margin improved by 50 basis points. It has announced a final dividend of Rs 43 per share. “Our cash and cash equivalents crossed $5 billion during the quarter. We have increased the dividend payout ratio to up to 40 per cent of post-tax profits effective FY14 to enhance returns for our shareholders,” said Rajiv Bansal, CFO, in a statement.

In terms of revenue earned across geographies, Infosys’ earnings from the North American market have actually dipped 1.5 per cent at 60.7 per cent in FY14 as against 62.2 per cent in FY13. In the case of Europe, its earnings have increased by 1.3 per cent to 24.4 per cent from 23.1 per cent earned in FY13.

In terms of revenue by industry, the BFSI segment accounted for 33.6 per cent of total revenues, followed by retail & life sciences at 24.3 per cent, and manufacturing 22.9 per cent.

“The key positive surprise in the result was expansion in EBIT margin by 46 basis points Q-o-Q to 25.5 per cent, while the negative surprise was the muted volume growth of 0.4 per cent Q-o-Q. The company has given a dollar guidance of 7-9 per cent for FY15, which is in line with our expectations,” said Ankita Somani, analyst for IT, with Angel Broking.

According to her, the management comments indicated that though the deal pipeline seems to be better than what it was the last year, the company is witnessing sporadic project cancellations or ramp downs in some of its deals. “While the improvement in the IT spending outlook for CY14 does bode well for FY15, estimated revenue outlook of the sector in general and Infosys in specific, we believe Infosys will continue to lag behind its tier-I peers like Tata Consultancy Services and HCL Tech on revenue growth,” Somani said.

Meanwhile, Infosys has given a salary hike of 6 to 7 per cent to its offshore employees. For onsite employees, the hike is in the range of 1 to 2 per cent, with effect from April 1, 2014.

PTI adds: Infosys CFO Rajiv Bansal said, “We have increased salaries. We have given salary hikes of 6-7 per cent for offshore and 1-2 per cent onsite employees, effective April 1,” The increase in salaries and promotions that have been rolled out and the investment in new visas is likely to impact the first quarter margins by about 3 per cent, he added.

Infosys added 10,997 employees (gross) in the last quarter of FY14 and 39,985 during the fiscal to take its total headcount to 160,405.



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