Infy Q2 net up 1.6%, ups FY '14 guidance

Infy Q2 net up 1.6%, ups FY '14 guidance

Software services exporter Infosys on Friday reported marginal rise of 1.6 per cent on year-on-year (YoY) basis in its consolidated net profit at Rs 2,407 crore for the second quarter ended September 30, 2013 (Q2), due to Rs 219 crore provisioning for visa-related legal case.

On a sequential basis, net profit grew 1.4 per cent. However, in dollar terms, net profit declined 11.1 per cent to $383 million (YoY).

CEO & MD of Bangalore-based Infosys, S D Shibulal said, “The company is engaged with the US government regarding a civil resolution of the government's investigation into the company's compliance with Form I-9 requirements and past use of B-1 visas. Based on the status of those discussions, Infosys has set aside a reserve of $35 million (Rs 219 crore) including legal costs.”

Buoyed by its Q2 consolidated revenue of Rs 12,965 crore, up 31.5 per cent YoY and 15.1 per cent on a sequential basis, the company revised its full-year rupee revenue guidance to 21-22 per cent, up from 13-17 per cent earlier.

During the interaction with reporters on the company's performance here, Shibulal said, “We witnessed broadbased volume growth, robust client additions, five large deal wins and increased sales momentum of our big data and cloud offerings.”

The five deals were valued at $450 million. Overall, it added 68 clients during the quarter under review.

Shibulal, referring to Australian market, its third-biggest, said the company won all six deals it competed in the past two quarters valued for over $75 million . The wage hike did not affect the company's margins much, as a depreciating rupee helped. The CFO of Infosys Rajiv Bansal said, “The impact of 300 basis points on margins due to wage hike was to an extent met by rupee depreciation helping margins by 250 basis points."

On the US shutdown impacting its future revenues, the Global Head of Financial Services and Insurance, and Head of Europe, B G Srinivas said, “If there are delayed order to clients (as a result of the shutdown), it could ultimately us, in the manufacturing and defence space.” The company added 2,964 employees on a net basis during the quarter.

The company also announced declaration of interim dividend of Rs 20 per share, or 400 per cent. Its liquid assets were valued at Rs 26,907 crore as on September 30, up from Rs 24,078 crore as on June 30, 2013.

Infosys stock hits 52-week high

Bangalore, DHNS: The second quarter performance, higher full-year guidance and 400 per cent interim dividend lifted the Infosys stock to its 52-week high of Rs 3,360 on the Bombay Stock Exchange (BSE) on Friday.

On the National Exchange (NSE) too, it hit a 52-week high of Rs 3,338 during the day. The trading volume of the Rs 5 face-value stock on the NSE was 51.61 lakh, while on the BSE it was 8.10 lakh.

Research analyst-IT at financial services firm Angel Broking Ankita Somani said, “With the current set of results, clearly the stock has got rewarded and we expect further re-rating of Infosys after two consecutive quarters of healthy performance”
The stock finally closed at Rs 3,273.90 on the BSE, a gain of Rs 149.75 or 4.79 per cent.

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