Infosys Q2 net up 3.5% at Rs 2,369 cr q-o-q

Company revises the guidance for full year, V Balakrishnan quits as CFO

Infosys has yet again managed to disappoint the street, but this time around it was due to the change in the guidance for EPS.

Infosys has guided EPS to be atleast $2.97 for the fiscal 2013 from the earlier $3.03. The reason for the change, the company said was rupee appreciation to the dollar. The company also reduced its FY13 revenue guidance from 6% (constant currency) to 5%.

CFO, V Balakrishnan has clarified that the growth forecast excludes revenue from Lodestone, which Infosys agreed to buy in a deal valued at 330 million Swiss francs last month.

The other big news that impacted the stock of the company was the announcement that V Balakrishnan has resigned from his post and will take on other responsibilities.

For the second quarter ended September 30, 2012 it reported net profit of Rs 2,369 crore registering a year on year growth of 24.3%, and a sequential growth of 3.5%.

The company’s revenue for the quarter was up 21.7% at RS 9,858 crore year-on-year. It reporterd a volume growth of 3.8% for the current quarter.

“Global economic uncertainties continue to face the industry. “We have increased employee wages, used some of our cash in a transformational acquisition of a consulting business and enhanced our investment in R&D and solutions. These initiatives will position us well in the industry and provide a strong platform for future growth,” said S D Shibulal, CEO and Managing Director, Infosys.

The other disappointment on the numbers front was the margin performance. For the quarter the company’s EBIT margins were down 160 basis points, due to increase in costs.

During the quarter the company added around 39 new clients as against 51 clients added in the first quarter of FY13. Infosys and its subsidiaries made a net addition of 2,610 employees during the quarter taking the total headcount to 1,53,761 employees as on September 30, 2012.

Shibulal said that this quarter saw the company add six large deals, two of which were in the $200 million range.

The cash and cash equivalents, including investments in available-for-sale financial assets, certificates of deposits and government bonds of the company was at Rs 22,570 crore as against Rs 18,601 crore during the same time last year.

“Our operating cash flows continue to be strong while our cash and cash equivalents crossed $4 billion. We are focused on high quality growth despite global currency and economic volatility,” said V Balakrishnan, Member of the Board and Chief Financial Officer.

Infosys also announced wage hikes of 6% for offshore employees and 2-3% for onsite. This will be a positive for the company as its attrition for the quarter had gone up slightly to 15% from the 14.9% last quarter.

Management changes

The Bangalore-based company also made an important management change with effect from 1 November 2012. According to the statement to BSE, V Balakrishnan, who is the Member of the Board and Chief Financial Officer of has put in his papers as the CFO from October 31, 2012.

Rajiv Bansal, currently Vice President  –Finance, will take over as CFO from November 1, 2012.

Balakrishnan, who was the CFO of the company would continue as a member of the Board and will be responsible for three key businesses - Infosys BPO, Finacle  and the India Business Unit, the company added.

During the second quarter, Infosys applied for 33 patent applications in India and the US.

In the morning trade on the BSE, the shares of the company were trading at Rs 2354.05 per share down 7 per cent as against previous day’s close.

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