Infosys's September quarter results were better than expected, and the sequential revenue growth was the fastest in the last 16 quarters. But investors were disappointed by the resignation of CFO Rajiv Bansal and a lowering of the revenue guidance for the year in dollar terms (constant currency guidance remains intact). These pushed the share price down on Monday by almost 4%.
The full-year revenue growth guidance in dollar terms was lowered to 6.4-8.4% from 7.2-9.2%. But the constant currency guidance was retained at 10-12%, indicating that the changes in dollar terms are because of cross-currency movements over which the company has no control.
Sikka noted that the industry generally has a weak second half, on account of furloughs and holidays. “We are maintaining our guidance. Our wish is that the third quarter of this year is much better than last year but our visibility is that it will not be. We know that even if we are flat, we would end up at the higher end of the guidance of 10- 12%,” he said.
Infosys has now beaten street expectations in two consecutive quarters. Revenue grew 4.5% sequentially in the June quarter, and surged 6% in the latest quarter to $2.3 billion. Such growth rates were last seen in 2012. In constant currency, the growth was 6.9%.
The revenue growth was helped by a one-time revenue accrual of $23 million from a manufacturing client who terminated its contract on account of factors internal to it. Excluding this one-off accrual, the dollar revenue growth was still impressive at 5%. The revenue grew 14.2% year-on-year in constant currency. The company signed five large deals with a total contract value of $983 million during the quarter and it added 82 clients, taking the total tally to over 1,000.
The firm's net profit grew 9.1% sequentially to $519 million and rose 1.6% from the same period last year. In the June quarter, the net profit had declined by 4.5% sequentially.
