Infosys Q4 net profit up 27% at Rs 2,316 crore

Infosys Q4 net profit up 27% at Rs 2,316 crore

Turbulent times: Projects below par growth for next fiscal

Infosys Q4 net profit up 27% at Rs 2,316 crore

Infosys, the second largest Indian IT company, on Friday, announced its net profit at Rs 2,316 crore for the quarter ended March 31, 2012, showing a rise of 27.4 per cent compared to Rs 1,818 crore in the same quarter previous year.

It reported a net profit of Rs 8,316 crore for the year ended March 31, 2012. This is 21.9 per cent higher than the Rs 6,823 crore profit reported for the year ended March 31, 2011.

However, the IT bellwether’s fourth quarter was a disappointment as compared to the previous quarter that ended December 31, 2011 since it reported a QoQ decline net profit by 2.4 per cent.

According to Infosys CEO S D Shibulal, the fourth quarter was not good because of delays in contract closure at the end of the quarter.

“Delay in decision making and change in client leadership has also affected us in this quarter as so our revenues have gone down,” added Shibulal.

Shocking guidance

The company, which is generally, regarded as the best guidance provider in the industry also disappointed investors with their dollar guidance of 8 to 10 per cent revenue growth for the fiscal ending March 31, 2013 with revenues expected to be in the range of $7,553 million to $7,692 million.

“This is extremely disappointing as the single digit guidance is even lower than Nasscom guidance of 11 per cent to 14 per cent,” said Analyst at Angel Broking, Ankita Somani.
 Infosys couldn’t meet the revenue guidance it had given announcing its third quarter results.

The company clocked revenue of Rs 8,852 crore whereas the guidance was in the range of Rs 9,391 crore to Rs 9,412 crore.

Infosys’ disappointing guidance made its share prices fall by 12.61 per cent throughout the day, ending at Rs 2,403.30 per share at BSE.   Somani added that it, according to her, would not be correct to call industry guidance but more of an Infosys specific one.

“Industry figures should come after others like TCS, HCL and Wipro announce their results,” she added.

Hiring spree

On a brighter note, the company has won five large deals in this quarter and three among them are over $100 million. Its share of revenue has also gone up in Europe, which Shibulal said is owing to their increased investment in the European market.

The attrition rate has also gown down from 15.4 per cent in Q3 to 14.7 per cent in the quarter under review.

The company, which has 1,49,994 employees as of March 31, 2012 is going to add another 35,000 employees for this fiscal, including 13,000 for its BPO arm. In order to establish a firm presence overseas, Infosys is also going to recruit 1,200 employees onsite.

However, the company sees IT spend in Europe to fall by almost 20 per cent leading to pressure on their clients on the expenditure front.

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