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Infosys Q4 results trigger fall in shares

Bangalore, Apr 12 : Infosys reported a 3.3 percent rise in its consolidated net profit to Rs. 2,394 crore for the Q4 that ended on March 31, 2013 and the in the quarter the revenues grew by 1.4 percent sequentially, said the IT bellwether as it announced results which failed to cheer the market and its shares fell impacting the stock market owing to unimpressive guidance.


The company's shares fell as much as 22 percent as it said its revenues ( dollar revenue for FY14) are expected to grow 6pc to 10.0pc , lower than analysts' and NASSCOM estimates, triggering a downslide in the stock market.

The BSE index was down by 300 points owing to the Infosys results.

"Global economic uncertainties remain challenging for the IT industry," said S. D. Shibulal, CEO and Managing Director.

"We are progressing well on our strategic direction of building a high-quality company which is relevant to our clients. We are making all the investments necessary to differentiate ourselves in the market place while positioning ourselves as a partner of choice for our clients."

"The global currency market continues to be volatile reflecting the uncertain economic environment. Our hedging strategy helps us to minimize the volatility impact," said Rajiv Bansal, Chief Financial Officer.

"We have a healthy balance sheet with our cash and cash equivalents at USUSD 4.4 billion."

Financial Highlights

Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended March 31, 2013

 Revenues were USD 1,938 million for the quarter ended March 31, 2013; QoQ growth was 1.4pc

YoY growth was 9.4pc

 Net profit was USD 444 million for the quarter ended March 31, 2013; QoQ growth was 2.3pc

YoY decline was 4.1pc

 Earnings per American Depositary Share (EPADS) was USD 0.78 for the quarter ended March 31, 2013; QoQ growth was 2.6pc

YoY decline was 3.7pc

 The Board of Directors recommended a final dividend of '27 per ADS for fiscal 2013 (equivalent to final dividend of approximately USD 0.50 per ADS at the prevailing exchange of '54.29 per USUSD ). The Register and Share Transfer Books of the Company will be closed from June 1, 2013 to June 15 2013 (both days inclusive)

 Liquid assets including cash and cash equivalents, current available-for-sale financial assets, investment in certificates of deposits and government bonds were USD 4.4 billion versus USD 4.1 billion as on December 31, 2012

Other highlights:

 Infosys and its subsidiaries added 56 clients during the quarter

 Gross addition of 8,990 employees (net addition of 1,059) for the quarter by Infosys and its subsidiaries

 156,688 employees as on March 31, 2013 for Infosys and its subsidiaries

 The company listed its American Depository Shares (ADS) on NYSE Euronext's (NYX) London and Paris markets

 The company has decided to set aside up to USUSD 100 million to invest in products, platforms and solutions ideas in line with Infosys 3.0 strategy

Outlook

The company's outlook (consolidated) for the fiscal year ending March 31, 2014, under IFRS is as follows:

 Revenues are expected to grow 6pc to 10.0pc ;

* Exchange rates considered for major global currencies: AUD / USD - 1.04; GBP / USD - 1.51; Euro / USD - 1.28

Business Highlights by the company:

 We continue to see good adoption our products and platforms from our clients. This quarter we had 12 wins (excluding Finacle) across industries and geographies, taking our total number of clients for products and platforms to over 75.

 In the last quarter we expanded our global footprint with a new delivery center in Munich, Germany, an onshore operations center in the Metro Atlanta Area, U.S. and a new delivery center for our BPO subsidiary in San Jose, Costa Rica.

 The District of Columbia awarded us to implement the District of Columbia Access System (DCAS). DCAS will be a state-of-the-art health and human services solution that provides the District's Health Benefit Exchange, a new integrated eligibility system for Medicaid, private health insurance and other programs with new case management capabilities that span programs and agencies. This system will be used to determine eligibility and to enroll individuals, families, and small businesses that purchase
health care coverage through the Exchange's online marketplace.

 Our focus on Cloud and Big Data as new growth areas continues to yield results; we currently have more than 200 engagements and 3,500 experts in our Cloud practice. Over the last quarter, we won over 10 engagements across Cloud services, Big Data and security. Our vision of investing in new growth areas with differentiated solutions was strengthened by the launch of Infosys BigDataEdge that radically simplifies the complex task of analyzing Big Data to discover relevant information.

 Mobility is an important focus for enterprises to make their organizations more efficient and customer centric and we are helping our clients realize the full business potential of mobility. In the last quarter we started 18 new engagements across various areas like business and technology consulting, customer outreach, mobile marketing, field services, enterprise efficiency.

 During the fourth quarter, we applied for 21 unique patent applications in India and the U.S. With this, we have 532 patent applications undergoing various stages of patent prosecution in India, the U.S. and other jurisdictions, and have been granted 84 patents by the United States Patent and Trademark Office and three patents by the Luxembourg patent office.

Board of Directors

Leo Puri has been appointed Additional Director of the Company with effect from April 11, 2013.

He will hold office up to the date of the Annual General Meeting, when his appointment as a director will be placed for the approval of the shareholders.

Puri is a Senior Advisor to McKinsey and Company's Asia-Pacific Financial Institution Practice. He has served as a Senior Partner of the firm, and has 25 years of experience of working in consulting to financial institutions. Between 2007 and 2011, he was a Managing Director with Warburg Pincus and Company, a leading Private Equity Firm, responsible for investments in India and financial institutions in relevant Asian markets.

Welcoming Leo Puri to the Board, K. V. Kamath, Chairman said, "Leo Puri is one of the best known leaders of corporate India. He brings enormous value with his vast experience in the consulting field."

--IBNS (Posted on 12-04-2013)

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