Infosys Posts 12% Rise in Net Profit but Cuts Guidance; CFO Quits

Infosys posts solid second quarter numbers. CFO Rajiv Bansal steps down.

• Net profit climbs 12 percent to Rs 3,398 crore for the Sept quarter
• Consolidated revenue was up 17.2 percent to Rs 15,635 crore
• The company lowers FY16 dollar revenue guidance to 6.4-8.4 percent from 7.2-9.2 percent
• The IT major maintains guidance at 10-12 percent in constant currency
• CFO Rajiv Bansal steps down, to be replaced by MD Ranganath
• Stock falls nearly 3 percent after announcement of earnings

India’s second largest software services firm Infosys today announced 9.8 percent increase in consolidated net profit to Rs 3,398 crore for the quarter ended September 30, 2015.

Net profit stood at Rs 3,096 crore in the same quarter last year.

Consolidated revenue was up 17.2 percent to Rs 15,635 crore in the September quarter from Rs 13,342 crore in the year-ago period, the company said in a filing to the BSE.

Infosys had reported a net profit of Rs 3,030 crore and revenues of Rs 14,354 crore for the April-June quarter of this financial year.

Shares of the company dropped 3.07 percent to Rs 1,132 apiece in early trade on BSE after the numbers were reported.

Infosys CFO Quits

The company also announced that its Executive Vice President and CFO Rajiv Bansal has resigned. He will be replaced by MD Ranganath at the close of business today.

Ranganath has held several leadership positions during a tenure of nearly 15 years with Infosys.

Dollar Revenue Guidance Cut

For 2015-16, the company gave a revenue guidance of 13.1 percent to 15.1 percent in rupee terms. In dollar terms, the company forecast growth of 6.4 percent to 8.4 percent.

We are experiencing a once-in-a-generation opportunity for a services company to help businesses maximise their potential with technology... I am encouraged by our progress. While results in any one quarter are transitory snapshots of a long journey, we do see our focussed execution along our strategy starting to produce encouraging results for our clients, shareholders and Infoscions.
— Vishal Sikka, MD & CEO, Infosys

Attrition rate was worrisome as it jumped to 19.9 percent in the quarter ended September compared to 19.2 percent in June quarter.

The IT company has signed 5 large deals worth $983 million with TCV during the quarter. It has aded 82 clients, taking total number of clients above 1,000.

The company has declared an interim dividend of Rs 10 per share.

Company Appoints Global HR Head

Infosys also announced that it appointed former Philips executive Krish Shankar as its global HR head, filling a role that had been vacant for nearly six months.

Shankar’s appointment comes at a time when CEO Vishal Sikka is looking to change how Infosys handles its employees. Sikka has also announced several changes including the removal of the company’s formal dress code.