Infosys projects double digit growth in 2016-17

Buoyed by resilient revenue growth of over nine percent in fiscal 2015-16, software major Infosys Ltd on Friday projected a higher growth of 12.8 percent (average) in dollar terms for 2016-17, as 97 percent of its earnings is from exports.

“Our consolidated annual revenue outlook for 2016-17 is 11.8-13.8 percent (12.8 percent average) growth in dollar terms on the exchange rate (Rs.66.26 per dollar) of March 2016 and 11.5-13.5 percent in constant currency,” the IT bellwether said in a statement here.

In rupee terms, revenue growth for this fiscal (FY 2017) is, however, projected to be lower at 12.7-14.7 percent on March exchange rate of Rs.66.26 per dollar, as against 17 percent growth achieved in FY 2016.

“Our growth trajectory improved in FY 2016 and we navigated the external business environment well. We will focus on leveraging operational efficiency levers for profitable growth,” said Infosys’ Chief Financial Officer M.D. Ranganath in the statement.

Earlier, the outsourcing firm reported Rs.3,597 crore consolidated net profit for fourth quarter (January-March) of fiscal under review (FY 2016), registering 16.2 percent year-on-year (YoY) growth and 3.8 percent quarterly in rupee terms.

In a regulatory filing to the stock exchange BSE, the IT bellwether said its consolidated revenue grew 23.4 percent YoY and 4.1 percent quarterly to Rs.16,550 crore in the quarter (Q4) under review.

Under the International Financial Reporting Standard (IFRS), net profit was up seven percent YoY and 1.7 percent quarterly to $533 million and revenue increased 13.3 percent YoY and 1.6 percent quarterly to $2,446 million ($2.5 billion).

For entire fiscal 2016, consolidated net profit grew 9.4 percent YoY to 13,491 crore and consolidated revenue 17.1 percent YoY to Rs.62,441 crore in rupee terms.

Under IFRS, net income was up 1.9 percent YoY to $2,052 million ($2.1 billion) and revenue increased 9.1 percent YoY to $9,501 million ($9.5 billion).

“I am proud of our company’s achievements in my first fiscal year as CEO. At the same time, I am humbled by the task that is still in front of us. We started the year just two quarters into a strategy to completely reimagine the notion of services and to transform the company,” Infosys’ Chief Executive Vishal Sikka said in the statement.

Operating profit for fourth quarter was 22.4 percent YoY and 6.6 percent quarterly in rupee terms and 12.6 percent YoY and 4.3 percent quarterly in dollar terms.

Similarly, operating margin for FY 2016 grew 12.9 percent in rupee terms and 5.2 percent in dollar terms under IFRS.

“Over the course of this year, we saw this strategy, of bringing automation and innovation to our clients, on a foundation of learning and education, start to show results in the organic growth of our client relationships, in our win rates in large deals, and in the types of projects we are seeing in strategic areas where we never participated before,” Sikka asserted.

The company and its subsidiaries worldwide added 89 clients in fourth quarter and 325 in the fiscal, taking their total number to 1,092 from 950 year ago.

“I am proud of what our teams have achieved this quarter and in the year,” Sikka added.

The company also declared a final dividend of Rs.14.25 per share of Rs.5 at par or a whopping 285 percent for fiscal under review.

With an interim dividend of Rs.10 per share or 200 percent for each share of Rs.5 at par for first six months (April-September), the total dividend for fiscal under review (FY 2016) is Rs.24.25 per share or a whopping 485 percent.

“We continue to reimagine our internal processes to increase organisational agility. The momentum of large deal wins continued this quarter and bookings were strong,” said Chief Operating Officer U.B. Pravin Rao.

Cash and securities were up Rs.34,468 crore ($5.2 billion) by fiscal-end from Rs. 31,526 crore ($4.8 billion) quarter ago and Rs. 32,585 crore ($5.2 billion) year ago.

“During the quarter, cash generation was strong. We managed a volatile currency environment effectively,” Ranganath claimed.

The company’s scrip was trading at Rs.1,172.05 per share on the BSE in the afternoon, Rs.10.25 lower than Thursday’s closing rate of Rs.1,182.30 per share and Rs.1,194 per share at the opening session.