Infosys posts strong topline growth in Q2
Despite a dip in profit on account of funds being set aside for an ongoing visa-abuse investigation in the US, IT bellwether Infosys Ltd on Friday reported a strong topline growth during the second quarter of the current fiscal and revised upwards its revenue outlook for the full year.
Infosys’ renewed focus on large outsourcing contracts since the return of its founder N R Narayana Murthy seems to be bearing results as the country’s second largest software services exporter crossed the $2 billion quarterly sales mark for the first time, with the markets cheering on by sending Infosys shares up 4.79 per cent at Rs 3,274.50 on Friday after the numbers were announced.
Beating street expectations, Infosys notched a 3.8 per cent growth quarter-on-quarter in revenues in dollar terms and a 15 per cent year-on-year growth. The company earned $2,066 million in the second quarter. Profit for the July-September quarter dropped 11.1 per cent from the previous year to $383 million. Part of that fall was due to $35 million set aside for the possible resolution of an ongoing dispute with US authorities over whether it misused temporary visas to bring Indian workers into its largest market.
The company recast its revenue growth projection for the current fiscal year — upping it to the range of nine to 10 per cent from the conservative six to 10 per cent forecast at the end of the first quarter of the current fiscal.
Senior management at Infosys attributed the growth to a return to a strategy of going after outsourcing deals like its IT peers have been doing in recent times, along with improved sales. A return to chasing outsourcing deals is incidentally one of the key strategic shifts that have taken place in Infosys since Murthy came out of retirement in June after the company’s growth began falling behind that of its peers as it pursued mainly large transformative IT deals.
Though fluctuations in the currency market on account of the weakened rupee gave the company some advantages in the second quarter, these were offset by the kicking in of hikes for staff through July, Infosys said. In rupee terms, Infosys saw a 15.1 per cent quarter on quarter growth in revenues —at Rs 12,965 crore — for the quarter that ended September 30. The year-on-year growth in revenue was 31.5 per cent.