Published: Sat, April 14, 2018
Culture&Arts | By Laurence Reese

Infosys posts Q4 net profit at Rs 3690 crore, meets estimates

Infosys posts Q4 net profit at Rs 3690 crore, meets estimates

The controversial Panaya subsidiary, which led to the fall of Vishal Sikka, has now been put up for sale along with another subsidiary Skava.

He added that the company will execute its strategy around the four pillars - scaling digital business ($2.79 billion in revenue currently), energizing client's core technology landscape via AI and automation, re-skilling employees, and expanding localisation in markets like US, Europe, and Australia.

Infosys said it expects revenue for 2018-19 to grow in the range of 6-8 per cent in constant currency terms and 7-9 per cent in U.S. dollar terms.

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Infosys, India's second-largest software exporter, on Friday announced that its net profit for the fourth quarter rose 2.4 per cent to ₹ 3,690 crore compared with the same period last year and forecast revenue to grow between 6-8 per cent in constant currency in the current financial year. It expects margins will be between 22-24% for the year ahead. It has projected a growth rate of 6-8% on constant currency basis. The company said it has signed deals over $3 billion past year including $905 million in the quarter to March. "Employee utilization remained healthy." said Pravin Rao, COO. In fiscal 2017, it reported profit of Rs 14,353 crore on revenue of Rs 68,484 crore.

"Within that strategic review, we made a decision to initiate active interest from external buyers (for Skava and Panaya) as they did not fit all of the criteria", Parekh said.

"The company has initiated identification and evaluation of potential buyers for Panaya and Skava following a strategic review of its businesses", said the IT major in a statement. After Sikka resigned, the Infosys board - under its new Chairman Nandan Nilekani - gave a clean chit to the acquisition, and dismissed allegations of wrongdoing.

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The company also announced the acquisition of WongDoody Holding Company, a US-based digital creative and consumer insights agency for a total consideration of $75 million including contingent consideration and retention payouts, subject to regulatory approvals and fulfilment of closing conditions, Infosys said.

"We believe that Infosys could save most of the key strategy messages for its Analyst Day on April 23", Keith Bachman, an analyst with BMO Capital Markets, wrote in a note dated 11 April.

Sikka, who joined Infosys from German software giant SAP SE in 2014, resigned a year ago, blaming a "continuous drumbeat of distractions" and a long-running row with the founders over company strategy.

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In the three months as CEO, Parekh has engaged with employees and clients, and set out what he calls "navigating your next" to engage with clients to adopt digital services. Operating margins stood at 24.3%. The Q3 net profit included a positive impact of Rs 1,432 crore on account of a conclusion of an advanced pricing agreement with the U.S. IRS. It grew 2.4 per cent y-o-y to Rs 36.9 billion.

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