INFOSYS - RESULTS - FOR Q3 FY 14 - REVENUE UP25%YoY; NET PROFIT UP 21.4% YoY

INFOSYS LTD

RESULTS FOR Q3 FY 14

Q/E DEC,2013

Infosys  has produced excellent results for the quarter ending December,2013.

·        Q3 Revenues grew by 0.5% QoQ;25% YoY

·        Net Profit grew by 19.4% QoQ; 21.4% YoY

·        Liquid Assets were Rs.27,440 cr as on 31.12.13; versus Rs.26,907 cr as on 30.09.13

Other Highlights

·        Infosys & subsidiaries added 54 clients during the Quarter

·        Gross addition of 6682 employees for the quarter

·        158,404 employees as on Dec,31,2013

·        Attrition Rate stands at 18.1% in the quarter, compared to 17.3% in previous quarter and 15.1% in Q3 FY 13.

·        For 9 months period, attrition rate is 16.3% as against 14.7%  in same period last year (Excluding subsidiaries)

―The year ahead looks exciting for the IT services industry. We believe the global economic environment has  improved and our clients are gaining confidence to invest in their strategic initiatives.‖ said S. D. Shibulal, CEO and Managing Director.―We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share.”

OUTLOOK

The company outlook (Consolidated) for fiscal year ended March 31,2014 under IFRS is as follows :

·        Revenues are expected to grow 24.4% - 24.9%

(Conversion at 1 US$ = Rs.61.81 for rest of the year)

Results - details

PARTICULARS	Q3FY14	Q2FY14	Q3FY13	9MFY14	9MFY13	YR'13
REVENUES	13026	12965	10424	37258	29898	40352
GROSS PROFIT	4705	4581	3858	13234	11420	15072
OPTG PROFIT	3259	2837	2677	8760	7967	10429
PBT	3990	3347	3180	10578	9652	12788
NET PROFIT	2875	2407	2369	7656	7027	9421
TOTAL Comp.Income	2831		2450	8024	7130
BASIC EPS	50.32	42.12	41.47	133.99	122.99	164.87

·        Basic EPS for 9 m/e Dec,2013 stands at Rs.133.99 against Rs.122.99 for same period last year, a growth of 8.9%. 

·        Net Profit for 9 m/e Dec,2013 stands at 7656 Cr against Rs.7027 cr for same period last year, an increase of 9%.

Q3 2014

Geographical segment – growth

·        North America declined by 0.8% sequentially and in constant currency.

·        Europe grew by 5.5% sequentially; and 3.5% in constant currency.

·        India grew by 9.2% sequentially; and 8.1% in constant currency.

·        Rest of the world grew by 4.9% sequentially; and 5.2% in constant currency

Industry segment – growth

·        FSI grew by 2.0% sequentially; and 1.5% in constant currency.

·        MFG grew by 0.1% sequentially;

·        and declined by 0.3% in constant currency.

·        RCL grew by 3.4% sequentially; and 2.9% in constant currency.

·        ECS grew by 0.8% sequentially; and 0.3% in constant currency.

What NRN says :

"We would like one of the two presidents to become the next CEO."

"I can't say what Rohan will want to do. Rohan is assisting me in my office and he's doing a brilliant job. And I'm grateful to him. But what he wants to do is a decision that's left to him considering he is 30 years old."

Talking of the two-president structure, he said: "It helps to create an internal platform that could be looked at by the nominations committee to decide on the next CEO. All of us would like one of these two people to become the next leader after Shibulal. But it's for the nominations committee to decide whether it should be an internal or external candidate."
"A CEO must have high aspiration, courage, must strive for excellence, be generous, very, very demanding and bring confidence and joy to the people around him".

On Rohan being a contender for Infosys CEO: This is all speculation. What he wants to do is a decision that should be left to him. What designation Rohan will hold in Infosys is not for me to decide. He is on leave from Harvard. He would like to go back to Harvard at an opportune time but who knows he may change his mind.

On changes to Infosys top management: After the appointment of the two presidents (BG Srinivas and UB Pravin Rao), the executive council became superfluous. Elimination of executive council will not create any perturbation in future growth. Changes at top management will make Infosys more robust, will make sales and delivery more effective and lead to cost optimization.
On existing leadership at Infosys: The beauty of Infosys is that it has a large cadre of leadership. The two presidents are just 50 year olds. Other people on the dias are all in their 40s, some are sub-40s.

On Infosys 3.0: There is nothing wrong with the new strategy. We want to get a larger share of revenue from transformational projects that provide better margins. We have said that the linear relation between revenues and number of people is not in best interest of the company. We are working toward products, platforms and solutions, which will help create non-linear relationship between revenues and number of people.
On Infosys succession: All of us would like one of the two presidents to become CEO after Shibulal, but this is not for us to decide. It is for the nominations committee to decide if they want an outsider.

On growth: Desire to get back to days when Infosys had industry leading growth rate and margins. When we will be there depends on how well we execute the various initiatives we have started.

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