JOIN USAmid the din of restructuring, India’s second-largest information technology (IT) services company Infosys has decided to hold its board meeting and announce its fourth quarterly results at Chennai, in a move which would be a first in the history of the company.
The $8.2 billion IT services company, headquartered in Bengaluru, has already announced its decision to postpone its fourth quarterly results to April 24.
Revealing the move, official sources at Infosys said that the changes in the venue of the board meeting as well as the timing of the results were as per the convenience of the company’s directors.
The company had earlier held its board meeting and result announcements during financial years 2009-10 and 2012-13 at its sprawling Mysuru campus.
By convention, Infosys announces its fourth quarterly results in the second week of April. Now the decision to announce the quarterly results for the January-March period and the annual results for the fiscal 2014-15 on April 24 will delay the process by about 10 days.
Some analysts say that the delay in the announcement is primarily to give Chief Executive Officer Vishal Sikka more time to fine-tune a strategy roadmap.
“Postponement of Infosys results might be keeping in view that Vishal Sikka, the new CEO, will get enough time to give out a direction and strategy for FY16 for Infosys, which has been struggling to match industry growth for three years. In addition, overall we have been getting mixed signals regarding the demand environment for IT companies. Therefore, a slight delay in result declaration may increase visibility on client budgets and project kickstarts,” said Ankita Somani, IT analyst with MSFL Research.
Big platform technologies
Taking his much-talked about ‘Renew and New’ strategy forward, Vishal Sikka, who assumed the mantle of CEO in August 2014, is attempting to bring in “the next big platform technologies”.
During the Morgan Stanley Investor Conference at San Francisco on March 4, the CEO said, “My sense is that it is possible to transition out of the current model, towards over a long term, into a new model without sacrificing intermediate steps. So that is why we are holding steadfast to our philosophy around this consistent possible growth, so not sacrificing our margin.”
Infosys reported an operating margin of 26.7 per cent at the end of third quarter of FY15, an increase of 60 basis points sequentially. Operating margin is a key indicator for the IT major, though it has witnessed a steady decline in the recent past from its heydays.
Besides the discussion on capital allocation and operational strategy, Infosys’ under Sikka has been working hard to improve revenue per FTE (full-time equivalent) or employees working full-time on projects.
It was $60,148 in the quarter to December 2014, up from $59,645 at the end of the previous quarter.
At the Morgan Stanley conference, Sikka also said the company’s revenue per employee was at $52,700 in the December 2014 quarter.