However, Infosys shares suffered from the company cutting its full year revenue growth guidance in dollar terms despite the positive quarter.
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The company said revenue is likely to grow 6.4 percent to 8.4 percent in the financial year, lowering its earlier guidance of 7.2 percent to 9.2 percent, according to a statement. It has clocked $4.6 billion in the first half of the fiscal, which means it needs to earn $4.6-4.8 billion of revenue in the next two quarters.
IT services companies such as Infosys, whose clients include Apple Inc (AAPL.O) and Wal-mart Stores Inc (WMT.N), make the lion’s share of their money servicing clients in the United States.
“Lesser number of working days and furloughs, especially in sectors like insurance and retail, could have an impact on the company’s performance in the second half of the ongoing fiscal”, Infosys Chief Operating Officer (COO) U B Pravin Rao said here during a press conference to announce its results. “Increase in revenue productivity was significant, volume growth was robust, client metrics and utilisation improved, while attrition remained stable”.
Infosys witnessed a remarkable second quarter, having signed 5 major deals worth $983 million with TCV, provider of growth capital to technology companies. Moreover, the company’s hedging program has helped it to minimize the impact of currency fluctuations, thereby boosting overall profitability. Total Income has increased from Rs. 126960.00 million for the quarter ended September 30, 2014 to Rs. 142990.00 million for the quarter ended September 30, 2015.
Noting that the company was taking steps to become a complete services organisation, Sikka said results in any one quarter were transitory snapshots of a long journey.
“We are experiencing a once-in-a-generation opportunity for a services company to help businesses maximise their potential with technology”. This is clear from the fact that its constant currency revenue guidance stays intact at 10-12% growth. It had earlier forecast 7.2 to 9.2 percent growth. Achieving a growth of over 9% on the higher side of the guidance band looks ambitious considering that the second half of the fiscal has historically been slow for Indian IT exporters due to holidays and annual of budgeting of IT spends by clients. He will be replaced by M.D. Ranganath, now head of strategic operations.
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Bansal, who has been also executive vice-president, will however continue as an advisor to Sikka and the board till December 31 for a smooth transition.
