Infosys Q4 meets street expectations

FY15 dollar revenue guidance at 7-9%; attrition rate ticks up

IT major Infosys today reported a 4.1% uptick in Q4 net profit at Rs 2,992 crore on a sequential basis.

On an annual basis, it posted a 23.2% increase in quarterly net profit as it added new clients including Chinese-owned Swedish automaker Volvo Car Corp. The company's had posted net profit of Rs 2,390 crore in the same period a year earlier.

Bangalore-based Infosys' stock was up almost 3% in early trade as the numbers met street expectations. The company's guidance for FY15, though lower that Nasscom’s industry growth projection, also met analyst estimates.

Revenue for the quarter was down 1.2% at Rs 12,875 crore compared to last quarter, ended December 31, 2013. It was, however, up 23.2% on a year-on-year basis.

In US dollar terms, the company’s net profit was up 5.2% at $487 million, and revenue was down 0.1% or flat at $2,092 million.

However, what continued to disappoint the street was the guidance numbers for FY15. The company guided for a growth of 7-9% for FY15, much lower than Nasscom’s growth rate of 13-15%. Several analysts though had expected the guidance to be in the 7-9% range keeping in mind the firm's restructuring battles, continous churn in senior management and pressure from discretionary deals.

“I am pleased that we have been able to double our growth rate for the full year compared to last year, though performance in the last quarter of FY14 has been disappointing,” said S D Shibulal, CEO and MD, Infosys. “We have guided for a revenue growth of 7-9% next year and remain firmly focussed on building the growth momentum by making all the necessary investments in our business,” he further added.

For the full year (2013-14), the company’s net profit was up 13% at Rs 10,648 crore and revenue grew 24.2% at Rs 50,133 crore.

The company added 50 clients during the quarter and 238 during the year.

Attrition at Infosys continued to show an upward trend as it touched 18.7% for the fourth quarter, up from 18.1% in the quarter ended December 31, 2013.