Infosys Q3 profit beats expectations, firm raises revenue guidance

Indian IT heavyweight Infosys raised its revenue forecast range for 2020, alongside a higher-than-expected net profit that it reported for the December quarter, on Friday.

The Bengaluru-headquartered company said it expected revenue to grow between 10% and 10.5% on a constant currency basis in the financial year ending March 2020, compared with its previous forecast of 9-10%.

“Large deal wins continue to be robust, with growth of 56% so far this year. We had a further reduction in attrition, demonstrating the results of our continued efforts towards strengthening employee engagement and value proposition,” COO Pravin Rao said.

The Bengaluru-based company said its net income rose to Rs 4,466 crore, or Rs 10.50 per share, from Rs 3,610 crore, or Rs 8.29 per share, a year earlier. 

The company's net profit grew by 10.6% quarter-on-quarter.

“Deal wins remain robust at $1.8 billion. Onshore effort of revenues reduced by about 50 basis points quarter-on-quarter, providing evidence to our view on the industry of greater shift towards offshore delivery in the industry. We believe the sector will further accelerate in FY21,” analysts at Emkay Global Financial Services said.

Brokerage house Motilal Oswal had expected Infosys to report a net profit at Rs. 4,297.9 crore, up 19.1% year-on-year, slightly short of the currently reported 23.7%.

The company's revenue from operations rose by 7.9% to Rs 23,092 crore. It grew by 2%, quarter-on-quarter.

The October-December quarter is usually heralded a slow quarter for IT services firms because of the furloughs of Thanksgiving, Christmas and new year holidays in the western countries -- geographies that Indian software services exporters rely heavily on.

On the sideline of the results, Infosys said that its audit committee found no evidence of financial impropriety or executive misconduct, as alleged in a whistleblower letter against CEO Salil Parekh.

“Attrition rate has been declining for the past two consecutive quarters... (The) audit committee has given (a) clean chit to both CEO and CFO on (the) whistleblower issue and also finds no proof of financial impropriety and misconduct… (It) is positive for the stock,” Sanjeev Hota, head of research, Sharekhan by BNP Paribas, said.

The quarterly results as well as the probe findings were announced after markets closed for the day. Shares of the IT giant rose by 1.7% at NSE and about 1.5% at BSE.