IT major Infosys has reported a profit of Rs 4,321 crore for the quarter ended March 2020, a 3.1 percent degrowth compared to December quarter 2019, impacted by lower other income (down 25.8 percent QoQ) and tax benefits in previous quarter.
Profitabilty was ahead of the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 4,230 crore, due to lower tax cost (down 16.1 percent QoQ).
In the quarter ended December 2019, the company had reported non-recurring benefit of Rs 242 crore on income tax refunds.
Revenue during the quarter increased 0.8 percent sequentially to Rs 23,267 crore, which was slightly below the CNBC-TV18 poll estimates of Rs 23,450 crore.
"While the immediate short-term will be challenging, looking ahead, we
can see that there is a strong interest to consolidate with partners with high-quality and agile service delivery and strong financial resilience. I am confident we will emerge from this stronger," Salil Parekh, CEO and MD said.
Dollar revenue degrew by 1.4 percent quarter-on-quarter to $3,197 million during January-March period of FY20, with profit falling 5.7 percent to $590 million QoQ, while revenue degrowth in constant currency was 0.8 percent QoQ.
Infosys said its Q4 digital revenues stood at $1,341 million (41.9 percent of total revenues), a 31.7 percent year-on-year growth and sequential growth of 2.6 percent in constant currency.
Considering the business uncertainty emanating from COVID-19, the company said it was unable to provide guidance on revenues and margins for FY21 at this stage. "The company will provide guidance after visibility improves."
Also the company missed its FY20 revenue guidance as full year revenue growth in constant currency was 9.8 percent and 8.3 percent in dollar terms due to lockdown in major parts of the world to limit the spread of novel coronavirus.
Company had estimated full year revenue growth in constant currency in the range of 10-10.5 percent over FY19.
For the financial year 2019-20, Infosys reported a 7.7 percent sequential increase in net profit at Rs 16,594 crore on revenue of Rs 90,791 crore that grew by 9.8 percent YoY, while operating profit rose by 2.6 percent to Rs 19,374 crore QoQ, but margin contracted to 21.3 percent (from 22.8 percent QoQ).
Infosys signed $1.65 billion worth deals during the quarter, taking total for the year to $9 billion, company said in its BSE filing.
"We completed a satisfying year on multiple counts – growth in all verticals and geographies, significant increase in large deal wins, good client mining and operational discipline," said Pravin Rao, COO.
"The impact caused by COVID-19 since last few weeks of March has led to significant displacement in the operating model while severely testing business continuity plans of companies," he added.
Operating earnings also missed analyst estimates as operating profit dropped 2.7 percent to Rs 4,927 crore and margin contracted 70 bps to 21.2 percent compared to previous quarter. A CNBC-TV18 poll estimates were at Rs 5,130 crore and 21.8 percent respectively.
Company has added 2 clients in $10 milllion+ category and 13 clients in $1 million+ band. Total active clients at the end of March quarter 2020 stood at 1,411 against 1,384 clients as of December 2019.
Meanwhile, Infosys has appointed Uri Levine as an Independent Director of the company after the resignation of DN Prahlad.
"The appointment is for a period of three years and is subject to the approval of shareholders," company said.
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The company announced final dividend of Rs 9.50 per share.
"Our relentless focus on liquidity will be supported by strong balance sheet of $3.6 billion cash, backed by accelerated cost take-outs and operational rigor. The final dividend of Rs 9.50 per share is a testimony of a strong free cash flow performance for FY20," Nilanjan Roy, CFO said.
Infosys share price corrected 12.3 percent during the March quarter and 13.75 percent in the last financial year 2019-20 largely due to COVID-19-led sell-off. However, it managed to outperform Nifty IT index which was down over 18 percent in Q4 and FY20.
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