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Rs 13,000 cr for shareholders: Takeaways from Infosys Q4 results

EBIT growth, dividends, buyback, new co-chairman among key developments

Puneet Wadhwa  |  New Delhi 

Infosys CEO Vishal Sikka during a press conference to announce the first quarter results of the company at its headquarters in Bengaluru
Infosys CEO Vishal Sikka during a press conference to announce the first quarter results of the company at its headquarters in Bengaluru

gave thumbs-down to Infosys’ fourth quarter numbers for the financial year 2016 – 17 (Q4FY17) with the stock tumbling nearly over 2.5%, or Rs 24, to Rs 945 levels in morning trade on the National Stock Exchange (NSE). It hit a low of Rs 941 and a high of Rs 990.

4Q revenues were marginally lower-than-expected, impacted by unexpected challenges in execution and other distractions. However, margins came in above our expectations, which is a positive. The company has been deriving operating efficiencies through automation and artificial intelligence," said Dipen Shah, senior vice-pesident for PCG research, Kotak Securities in a post note.

"FY18 is marginally lower than what we had expected. While the does reflect the challenging macro environment, we believe it does incorporate some degree of conservatism after several quarters of misses. The implied CQGR of about 2.5% in FY18, seems achievable," he adds.
 

Here are the key highlights of the results:
 
 
Net profit & revenue: For the quarter ended March 2017 (Q4FY17), reported a consolidated net profit of Rs 3,603 crore, up 0.2% year-on-year (y-o-y) basis, but down 2.8% quarter-on-quarter basis. Revenue for the period stood at Rs 17,120 crore, as compared to Rs 16,550 crore in the year ago period. For the full year – FY17 – the revenue stood at Rs 68,484 crore as compared to Rs 62,441 crore in FY16.
 
/ Buyback: One of the most significant announcements made while announcing its was in its capital allocation policy, which it revised taking into consideration the strategic and operational cash requirements in the medium term.
 
currently pays dividends up to 50% of the post tax profits in a financial year. Starting FY18, the company will raise this to 70% of the free cash flow of the corresponding financial year. That apart, the Board has decided to pay Rs 13,000 crore to shareholders by way of dividend or during FY18, subject to necessary approvals.
 
The / dividend amount, analysts feel could have been more. By comparison, software exporter, TCS, had recently announced a of its equity shares at Rs 2850 apiece amounting to Rs 16,000 crore. CLICK HERE FOR THE FULL STORY
 
Guidance: expects its FY18 constant currency dollar revenue growth at 6.5-8.5%, which was lower than analysts' forecast of 7-9%.
 
“Growth outlook for next year will be the focal point of and we expect to guide for a 7 – 9% year-on-year (y-o-y) growth for FY18E in CC terms,” analysts at had said in a expectation note.

CLICK HERE TO TRACK IT STOCKS
 
EBIT growth: has guided for an EBIT (earnings before interest and taxes) growth of 23 – 25%, which is lower that what analysts had expected.
 
Analysts at ICICI Securities, for instance, expected EBIT margins to remain unchanged q-o-q to 25.1%, led by operational efficiency offset by currency headwind. “We expect to guide for 7 – 9% constant currency revenue growth, pricing trends, M&A strategy and deal pipeline,” they had said in a recent note.
 
Board changes: has appointed Ravi Venkatesan, an independent director as co-chairman of the Board.
 
“Venkatesan, who has been on the Board of since April, 2011 has made valuable contribution to the development of strategic direction of the Company during his tenure. He will help me enhance the board engagement in supporting the Management in execution of company’s strategy”, said R. Seshasayee, Chairman of the Board in a statement.

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Rs 13,000 cr for shareholders: Takeaways from Infosys Q4 results

EBIT growth, dividends, buyback, new co-chairman among key developments

EBIT growth, dividends, buyback, new co-chairman among key developments gave thumbs-down to Infosys’ fourth quarter numbers for the financial year 2016 – 17 (Q4FY17) with the stock tumbling nearly over 2.5%, or Rs 24, to Rs 945 levels in morning trade on the National Stock Exchange (NSE). It hit a low of Rs 941 and a high of Rs 990.

4Q revenues were marginally lower-than-expected, impacted by unexpected challenges in execution and other distractions. However, margins came in above our expectations, which is a positive. The company has been deriving operating efficiencies through automation and artificial intelligence," said Dipen Shah, senior vice-pesident for PCG research, Kotak Securities in a post note.

"FY18 is marginally lower than what we had expected. While the does reflect the challenging macro environment, we believe it does incorporate some degree of conservatism after several quarters of misses. The implied CQGR of about 2.5% in FY18, seems achievable," he adds.
 
Here are the key highlights of the results:
 
 
Net profit & revenue: For the quarter ended March 2017 (Q4FY17), reported a consolidated net profit of Rs 3,603 crore, up 0.2% year-on-year (y-o-y) basis, but down 2.8% quarter-on-quarter basis. Revenue for the period stood at Rs 17,120 crore, as compared to Rs 16,550 crore in the year ago period. For the full year – FY17 – the revenue stood at Rs 68,484 crore as compared to Rs 62,441 crore in FY16.
 
/ Buyback: One of the most significant announcements made while announcing its was in its capital allocation policy, which it revised taking into consideration the strategic and operational cash requirements in the medium term.
 
currently pays dividends up to 50% of the post tax profits in a financial year. Starting FY18, the company will raise this to 70% of the free cash flow of the corresponding financial year. That apart, the Board has decided to pay Rs 13,000 crore to shareholders by way of dividend or during FY18, subject to necessary approvals.
 
The / dividend amount, analysts feel could have been more. By comparison, software exporter, TCS, had recently announced a of its equity shares at Rs 2850 apiece amounting to Rs 16,000 crore. CLICK HERE FOR THE FULL STORY
 
Guidance: expects its FY18 constant currency dollar revenue growth at 6.5-8.5%, which was lower than analysts' forecast of 7-9%.
 
“Growth outlook for next year will be the focal point of and we expect to guide for a 7 – 9% year-on-year (y-o-y) growth for FY18E in CC terms,” analysts at had said in a expectation note.

CLICK HERE TO TRACK IT STOCKS
 
EBIT growth: has guided for an EBIT (earnings before interest and taxes) growth of 23 – 25%, which is lower that what analysts had expected.
 
Analysts at ICICI Securities, for instance, expected EBIT margins to remain unchanged q-o-q to 25.1%, led by operational efficiency offset by currency headwind. “We expect to guide for 7 – 9% constant currency revenue growth, pricing trends, M&A strategy and deal pipeline,” they had said in a recent note.
 
Board changes: has appointed Ravi Venkatesan, an independent director as co-chairman of the Board.
 
“Venkatesan, who has been on the Board of since April, 2011 has made valuable contribution to the development of strategic direction of the Company during his tenure. He will help me enhance the board engagement in supporting the Management in execution of company’s strategy”, said R. Seshasayee, Chairman of the Board in a statement.
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Business Standard
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Rs 13,000 cr for shareholders: Takeaways from Infosys Q4 results

EBIT growth, dividends, buyback, new co-chairman among key developments

gave thumbs-down to Infosys’ fourth quarter numbers for the financial year 2016 – 17 (Q4FY17) with the stock tumbling nearly over 2.5%, or Rs 24, to Rs 945 levels in morning trade on the National Stock Exchange (NSE). It hit a low of Rs 941 and a high of Rs 990.

4Q revenues were marginally lower-than-expected, impacted by unexpected challenges in execution and other distractions. However, margins came in above our expectations, which is a positive. The company has been deriving operating efficiencies through automation and artificial intelligence," said Dipen Shah, senior vice-pesident for PCG research, Kotak Securities in a post note.

"FY18 is marginally lower than what we had expected. While the does reflect the challenging macro environment, we believe it does incorporate some degree of conservatism after several quarters of misses. The implied CQGR of about 2.5% in FY18, seems achievable," he adds.
 
Here are the key highlights of the results:
 
 
Net profit & revenue: For the quarter ended March 2017 (Q4FY17), reported a consolidated net profit of Rs 3,603 crore, up 0.2% year-on-year (y-o-y) basis, but down 2.8% quarter-on-quarter basis. Revenue for the period stood at Rs 17,120 crore, as compared to Rs 16,550 crore in the year ago period. For the full year – FY17 – the revenue stood at Rs 68,484 crore as compared to Rs 62,441 crore in FY16.
 
/ Buyback: One of the most significant announcements made while announcing its was in its capital allocation policy, which it revised taking into consideration the strategic and operational cash requirements in the medium term.
 
currently pays dividends up to 50% of the post tax profits in a financial year. Starting FY18, the company will raise this to 70% of the free cash flow of the corresponding financial year. That apart, the Board has decided to pay Rs 13,000 crore to shareholders by way of dividend or during FY18, subject to necessary approvals.
 
The / dividend amount, analysts feel could have been more. By comparison, software exporter, TCS, had recently announced a of its equity shares at Rs 2850 apiece amounting to Rs 16,000 crore. CLICK HERE FOR THE FULL STORY
 
Guidance: expects its FY18 constant currency dollar revenue growth at 6.5-8.5%, which was lower than analysts' forecast of 7-9%.
 
“Growth outlook for next year will be the focal point of and we expect to guide for a 7 – 9% year-on-year (y-o-y) growth for FY18E in CC terms,” analysts at had said in a expectation note.

CLICK HERE TO TRACK IT STOCKS
 
EBIT growth: has guided for an EBIT (earnings before interest and taxes) growth of 23 – 25%, which is lower that what analysts had expected.
 
Analysts at ICICI Securities, for instance, expected EBIT margins to remain unchanged q-o-q to 25.1%, led by operational efficiency offset by currency headwind. “We expect to guide for 7 – 9% constant currency revenue growth, pricing trends, M&A strategy and deal pipeline,” they had said in a recent note.
 
Board changes: has appointed Ravi Venkatesan, an independent director as co-chairman of the Board.
 
“Venkatesan, who has been on the Board of since April, 2011 has made valuable contribution to the development of strategic direction of the Company during his tenure. He will help me enhance the board engagement in supporting the Management in execution of company’s strategy”, said R. Seshasayee, Chairman of the Board in a statement.

image
Business Standard
177 22