Bangalore, April 15 IANS | 4 months ago

India's second largest software exporter Infosys Ltd Tuesday lowered revenue growth to 7-9 percent in dollar terms for new fiscal 2014-15 due to a disappointing fourth quarter (January-March) of just concluded 2013-14.


"We have guided for a revenue growth of 7-9 percent in FY 2015 and remain focused on building the growth momentum by making necessary investments in our business," Infosys chief executive S.D. Shibulal said in a statement here.

Though the IT bellwether's revenue performance in fourth quarter (Q4) was disappointing with a sequential decline of 0.4 percent in dollar terms, growth on annualised basis was up 7.9 percent year-on-year (YoY) to $2.1 billion.

"We have been able to double our growth rate for the full year compared to last year, though performance in the last quarter (Q4) has been disappointing," Shibulal admitted in the statement.

On annualised basis, revenue grew 11.5 percent YoY to $8.25 billion for entire fiscal 2014 from $7.4 billion in fiscal 2013.

"Lower guidance for FY 2015 is a reflection of our lower than expected performance in third and fourth quarters of FY 2014," Shibu Lal told IANS after the results were announced.

Following co-founder N.R. Narayana Murthy's return as executive chairman June 1, 2013, the company revised its annual guidance to 9-10 percent in July from 6-10 percent, projected in April, as 97 percent of its revenue is from exports, with the US accounting for 60 percent and Europe 25 percent.

The lower forecast had a negative impact on the company's shares as reflected on its rise and fall within hours of trading session began on the Bombay Stock Exchange (BSE).

According to a leading stock analyst, though Infosys share of Rs.5 par value opened higher at Rs.3,347 from Friday's closing of Rs.3,235 and touched a high of Rs.3,371, the price subsequently slumped to a low of Rs.3,270 and remained at Rs.3,287 at noon Tuesday.

In a regulatory filing to the stock exchanges earlier, the blue-chip firm said net profit for quarter under review (Q4) increased 25 percent YoY to Rs.2,992 crore and consolidated revenue was up 23 percent YoY to Rs.12,875 crore, as per the Indian accounting standard.

Sequentially, however, net profit growth was 4.4 percent, while revenue declined 1.2 percent.

Under the International Financial Reporting Standard (IFRS), net income for fourth quarter grew 9.7 percent YoY to $487 million and gross revenue 7.9 percent YoY to $2.1 billion.

For the entire fiscal (FY 2014), net profit grew 13 percent YoY to Rs.10,648 crore, while consolidated revenue increased 24 percent YoY to Rs.50,133 crore, as per the Indian accounting standard.

Under the IFRS, net income, however, grew 1.5 percent YoY to $1.75 billion and gross revenue 11.5 percent YoY to $8.25 billion.

"Our reserves, including cash and cash equivalents crossed Rs.30,000 crore ($5 billion) during the quarter," chief financial officer Rajiv Bansal said in the statement.

The company has also increased the dividend payout ratio to 40 percent of post-tax profits from FY 2014 to enhance returns to its shareholders.

In the fourth quarter, the company added 50 clients, taking the number of new clients to 238 in FY 2014.

On the hiring front, the company added 10,997 employees in the quarter and 39,985 during the fiscal, taking the total headcount to 160,405 from 156,688 year ago.

With the exit of 8,996 employees in the last quarter and 36,258 people during the fiscal, the company's attrition (exit) rate shot up to 18.7 percent from 16.3 percent year ago.

"Our attrition rate at 18.7 percent is for the quarter and fiscal was the highest for various reasons. It includes 1.5 percent involuntary exits," Shibulal noted.

To check further exits, the company gave six-seven percent compensation hike for the new fiscal to offshore (domestic) employees and one-two percent hike to onshore (overseas) staff besides promotions and progressions.

"We also gave 6-8 percent compensation hike for offshore employees and 3 percent for onsite employees in May and June last year. We are recruiting about 200 people for sales this fiscal (FY 2015) from the best of the global B-schools, including Harvard, MIT and Stanford," Shibulal said.

(Posted on 15-04-2014)


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