Track the latest updates on Infosys Q4 and what the management has to say.
2:23 pm: On that note, we are calling it a day for the live blog.
2:11 pm: Nifty IT is down by 1.91 percent.
2:01 pm: Sanjoy Sen, Doctoral Research Scholar, Aston Business School, UK says: "Apart from what Infosys describes as "unforeseen execution challenges" the slowdown in IT budgets as a result of this global uncertainty is demonstrated by the slowdown in growth in key IT intensive sectors such as BFSI.
1:40 pm: BFSI has been the growth engine for Infosys, says COO Pravin Rao.
1:33 pm: I am sticking to USD 20 billion, says Sikka. It is more focussed on innovation, on improving business's ability to become competitive. Over-dependence on visa is a bad thing. With regulation, it becomes more of an imperative. The main concern is a deep-rooted concern about the future of work. Questions are distracting,but it hasn't affected my morale, says Sikkar referring to the spat between founders and management.
1:17 pm: The Nifty IT index fell more than 2 percent as Infosys extended losses after analysts' conference call, down nearly 4 percent. The appreciation in rupee also dampened sentiment as it gained past 64.50 against the US dollar, down 26 paise at 64.41.
12:45 pm: Overall a weak quarter from Infosys with a miss on revenues. We think that growth momentum is not encouraging as YoY CC growth has been slowing down through the year. We don’t expect material changes to estimates, but the stock will struggle for re-rating in absence of material growth acceleration, says Rumit Dugar, Director, India TMT, Religare Capital Markets, Institutional Research.
12:40 pm While a buyback has not been explicitly announced, out of the total cash of Rs 38,773 crore (USD 6 billion), the company plans to return Rs 13,000 crore (close to USD 2 bn) to shareholders in FY18. While details are awaited, the dividend per share works out to Rs 49 per share (FY17 at Rs 25.75 per share), factoring dividend distribution tax as well.
12:31 pm: The analyst call just ended.
12:30 pm: The only thing we have to watch out is the deal size are becoming smaller, we need to focus on that.
12:20 pm: Overall indicator would be FY17 free cash flow, says Ranganath. We are looking at ways to optimise development centre without diluting our tech spends.
12:14 pm: When we think of Infosys, for the times that are ahead of us, the times of digital -- those are the metrics that matter, says Sikka. We are working on investments in US, adds Sikka. It is our endeavour to deal with media distractions and ensure company doesn't suffer. the attition numbers at a very healthy level. Group attrition around 17 percent.
12:08 pm: We are learning from our past three quarters. A whole bunch of new areas have shown triple-digit growth. There are pockets like consulting, which are a challenge for us, admits Sikka.
12:03 pm We expect around mid to high of single digits in pay hikes, says Ranganath.
12:00 pm: In retail, we see pockets of opportunities, says Sandeep Dadlani, President and Head of Americas for Infosys. Even in a disrupting industry, we will drive more opportunities in retail, he said.
11:57 am: The times we are in demand that we are delivering innovative things. And outsourcing programmes deliver to the cost efficiency, clients look for, says Sikka. In terms of AI, for the next year and a half, it will be a good opportunity for us.
11:55 am: Floor now opened for questions.
11:51 am: We will continue our relentless focus on role mix optimisation on site and automation, says CFO.
11:49 am: Onsite employee costs reduced to 38 percent this fourth quarter. For full year, total employee costs was held steady at 54.7% despite compensation increases.
11:48 am: Ranganath begins talking. The operating margin guidance for FY17 was 24-25%. For the year operating margin is closer to the higher band, says Ranganath.
11:40 am: In investment and ecosystem, we continue to invest in its AI platform Mana. We continue to support startups. We made seven new investments. Our margin outlook for operating margins in this fiscal year is 23-25 percent, says Sikka.
11:39 am: FY17 revenues from new software services grew at more than 42 percent. Starting Q1, we will report on a quarterly basis, says Sikka.
11:30 am: Sikka kicks off analyst call
11:11 am: Stay tuned to the analysts call in another half hour.
11:09 am: The Indian rupee recovered sharply after yesterday's fall, at 64.31 against the US dollar, up 36 paise from previous close.
11:06 am: IT stocks drag Nifty by 22 points; Infosys and TCS down 2 percent each. Nifty IT down over 1.5 percent.
10:58 am: Motilal Oswal believes the revised payout policy (of giving away 70 percent of free cash flows in dividends from 50 percent earlier), is only a terminology change.
10:55 am: Kotak Institutional Equities, which has an 'Add' recommendation for the stock said in a note to investors, "Overall, the business is moving in the right direction, but with interruptions." However, new deal signings were weak and needs close monitoring.
10:51 am: Meanwhile, a few experts continue to keep up their faith in the erstwhile bellwether IT company, albeit for the longer run. In the run-up to the results Rajen Shah of Tradebulls Group told CNBC-TV18 that Infosys is not a stock where one can make money in six months, it is a stock for long-term investors of over 3 years.
10:50 am: "Bad news is not stopping (for IT companies) and good news is not coming," says Ashwani Gujral of ashwanigujral.com. He sees nothing much to be read in the results.
10:47 am: Infosys stock price is down 2.2 percent at Rs 946.75 per share.10:40 am: Andrew Holland, CEO, Avendus Capital Alternate Strategies says
the whole model for Infosys has broken and that is what you are seeing in terms of the earnings and if you throw in the rupee headwind for them then the stock could easily fall 10 percent before it is even worth looking at.
10:38 am: The role of visas in our industry has become too strong over 15 years, says Sikka. We have to deliver value to our clients, adds Sikka. We have to live with the visa problem, he says. A healthy mix of local talent is a good thing.
10:32 am: Sikka is talking about the 'cohesive' board. Revenue growth to USD 20 billion by 202o is an aspiration, stresses Sikka. We are intensely focussing on cost, he said. Revenue per employee is already more than USD 100,000. Dual focus will be on automation and software, he said.
10:26 am: Capital allocation takes into account capital expenditure requirements, says Ranganath. We generated USD 1.7 billion in cash.
10:25 am: Ranganath warns of operational costs owing to investments in the US.
10:18 am: We learn from the past in terms of guidance. Pravin Rao, COO, Infosys, says there have been easing of regulatory pressures in the US. We remain confident on financial services. On manufacturing, it has been flat. Core industrial manufacturing is doing well. We are challenged on high-tech space. We expect softness on high-tech to continue. We will focus less on actual growth and we will get consulting right.
10:14 am: MD Ranganath, CFO, says for FY17 cash from operations crossed USD 2 billion. We focussed on efficiency and margins, says Ranganath. Capital allocation policy clearly says up to Rs 13,000 crore. this takes into account our cash needs for the next couple of years. Keeping in view, we will do it in FY18.
10:11 am: There is a challenge in the industry, admits Sikka with increasing commoditisation of many services. The need is for more services, stresses Sikka. Ranga 13,000 crore allocation as dividends.
10:07 am: Infosys CEO Vishal Sikka begins talking. Net employee additions was good. the revenue per employee went up 2%. Utilisation is at a high of a decade. We will be focussing on large deals We did USD 800 million in large deals. Overall, on all these metrics, on cash flow generation, we did well, he said. About 65 percent of our workforce produces 55 percent of our revenue. the imperative is clear. We have to bring automation and AI in everything we do.
10:00 am: Top management walking to the media room.
9:55 am: Vishal Sikka will be taking to the floor and soon taking questions from the assembled reporters. MS on Infosys says that payouts have increased and results were below its estimate.
Software services exporter Infosys reported profit at Rs 3,603 crore for January-March quarter, which represented a de-growth of 2.8 percent against Rs 3,708 crore in previous quarter. Revenue fell 0.88 percent to Rs 17,120 crore compared with Rs 17,273 crore previous quarter. According to average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 3,570 crore on revenue of Rs 17,235 crore for the quarter. Dollar revenue during the quarter stood at USD 2569 million, a growth of 0.7 percent over USD 2551 million in December quarter, which was slightly lower than analysts' forecast of USD 2,584 million. Analysts missed on dollar revenue guidance as it expects its FY18 constant currency dollar revenue growth at 6.5-8.5 percent, which was lower than analysts' forecast of 7-9 percent.
While Infosys has been battling many 'disruptions' with its founder questioning payouts to top executives, Vishal Sikka has been working around the clock to put out the fires. With Trump's visa policy clamping down on non-immigrant work permits, IT industry has factored in a downturn in this fiscal year. Infosys, considered the bellwether, is in the unenvious position of having to vindicate its guidance for the year, which, to sure, has been conservative.The Great Diwali Discount!
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