IT services major Infosys on Friday reported a moderate 3.5% growth in its net profit at Rs 3,097 crore for the quarter ended March 31, missing market expectations as business remained challenging for the company.
The country's second largest software exporter had recorded a net profit of Rs 2,992 crore in the January-March quarter of 2013-14. Revenue during the quarter under review rose by 4.2% to Rs 13,411 crore from Rs 12,875 crore in the comparable period in the previous fiscal. On a quarter-on-quarter, profit fell 4.7% from Rs 3,250 crore in October-December period. Revenue declined 2.8% from Rs 13,796 crore.
Infosys said it expects revenue growth in the range of 10-12% only for 2015-16 fiscal in constant currency terms, whereas the Nasscom estimate for the industry 12-14%. "We are expecting to grow at 10-12%. We are targeting revenues of US $20 billion by 2020. Our average revenue per employee is expected at US $80,000 by 2020," Infosys CEO Vishal Sikka said. Reacting to disappointing numbers, Infosys shares plunged by almost 6% to close at Rs 1,996.25 apiece on BSE.
Infosys's rival TCS, Wipro and HCL Tech all had reported earning numbers that fell below expectations, hit by currency fluctuations as the US dollar grew stronger against all major currencies and Indian rupee. "We see industry going through a fundamental and structural transition. Despite being a challenging quarter, I am encouraged by the early successes in executing our Renew-New strategy, on a foundation of learning," Sikka said.
Addressing investors in a concall, he said that the pricing is under pressure due to increasing commoditisation in the tradition outsourcing business.
In US dollars, Infosys net profit grew 2.3% to US $498 million in the fourth quarter of 2014-15 from USD 487 million in the year-ago period; revenues rose 3.2% to US $2.159 billion from US $2.092 billion a year ago. Quarter-on-quarter, net profit fell 4.6% from US $522 million in December quarter, whereas revenue declined 2.6% from US $2.218 billion during the same period. For the entire 2014-15 fiscal, Infosys' net profit grew 15.8% to Rs 12,329 crore compared to 2013-14 fiscal, while revenue was up 6.4% to Rs 53,319 crore.
