Infosys Ltd’s January to March quarter profit dropped, and the company guidance for the new fiscal year fell short of expectations.
Profit fell 1 percent to Rs 3,562 crore compared to Rs 3,599 crore in October to December period. The consensus of analyst estimates tracked by Bloomberg stood at Rs 3,570 crore.
Revenue stood at Rs 14,920 crore compared to Rs 14,949 crore in the previous quarter, according to the company’s financial statement on the exchanges.
Revenue in terms of dollars rose 0.7 percent to $2,569 million for the quarter. Annual dollar revenue rose 7.4 percent to $10,208 million, falling within the company’s guidance of 7.2 percent to 7.6 percent. This guidance was slashed thrice over the last three quarters.
The company’s earnings before interest and tax fell 0.7 percent to Rs 4,050 crore, from Rs 4,078 crore in the October to December quarter. EBIT margin contracted 13 basis points to 27.1 percent.
Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance.Vishal Sikka, Chief Executive Officer of Infosys
Conservative Guidance
Infosys expects revenue in constant currency terms to rise between 6.5 percent to 8.5 percent in the the financial year 2017-18. Analysts had expected the company to forecast 7 percent to 9 percent growth. In dollar terms, Infosys expects sales to increase between 6.1 percent to 8.1 percent.
Infosys’ revenue grew 8.3 percent in constant currency terms and 7.4 percent in dollar terms in the financial year 2016-17.
In January, the company had projected dollar sales growth in the 8.4 percent to 8.8 percent range.
$2 Billion Promise
Infosys said it will return as much as Rs 13,000 crore ($2 billion) to shareholders via a dividend or stock buyback, or both, the company said in a notification to the exchanges.
It also announced a dividend of Rs 14.75 per share for the financial year 2016-17.
The company's indicated dividend yield stands at 2.7 percent compared to 1.6 percent average amongst competitors, according to Bloomberg data.
New Co-Chairman
The board of the information technology firm appointed Ravi Venkatesan as co-chairman. Venkatesan, who has been serving as an independent director on the company's board, is also the chairman of government-owned Bank of Baroda.
The current chairman R Seshasayee and the rest of the board had come under criticism from co-founders including NR Narayana Murthy in the last couple of months. Murthy had criticised salaries given to the top management, and Infosys' board composition.
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