Infosys ups FY14 guidance to 9-10%, net at Rs 2,410 cr

Net profit up 1.6%, revenues zoom 31.5% during the Sept quarter

Kicking off the second quarter earnings season on a high note, the country's second largest software services firm Infosys upped the lower end of its revenue outlook, saying it  will at least grow by 9% during the financial year 2013-14.

Announcing its September quarter results on Friday, Infosys -- once considered to the bellwether for the IT sector -- said that it expects revenues to grow in the range of 9-10%, up from the previously estimated range of 6-10% this fiscal.

The revised guidance comes on back of improving economic environment in its key market - United States  - and winning of some large deals in the recent past.

The upbeat commentary from the company is likely to foster belief that the return of Infosys co-founder NR Narayana Murthy as its executive chairman in June this year is leading to positive results. During the last couple of years, Infosys had been faltering at its own estimates and had become a laggard in the pack of top IT firms.

For the three months ended September 2013, the company reported a 1.6% rise in net profit at Rs 2,407 crore against the same period last year on back of revenues of Rs 12,965 crore, which grew by 31.5% year-on-year.

Earnings suffered from a Rs 219 crore rupee provision for "visa related matters."

In a statement the company said, “Infosys is engaged in discussions with the US Attorney's office and other government departments regarding a civil resolution of the government's investigation into the company's compliance with Form I-9 requirements and past use of B-1 visas. Based on the status of those discussions, Infosys has set aside a reserve of $35 million including legal costs. Because the discussions are ongoing, Infosys cannot provide additional details at this time.” More details are awaited on this matter.

The company's earning per share stood at Rs 42.12 for the quarter.

Sequentially, Infosys' net profit grew by 1.4% and revenues were up by 15.1% in rupee terms.

"During the quarter we witnessed broad-based volume growth, robust client additions, five large deal wins and increased sales momentum of our big data and cloud offerings. This growth is a result of our focus on execution, which helps our clients achieve their objectives." said S D Shibulal, CEO and Managing Director.

"We will continue with planned investments and initiatives to explore new avenues of growth. We remain watchful of the sustainability of improving global economic fundamentals", he added.

The company added 68 clients during the quarter and it declared an interim dividend of Rs 20 per share. Since his taking charge, Murthy has been trying to put the house in order at Infosys, which has led to significant re-organisation of the company and has also led to several key executives leaving the firm. In order to put the company back on the growth path, Murthy has also been trying to put the company's focus back on its major clients and large deals.

Rajiv Bansal, Chief Financial Officer of Infosys said that the global currency market remains volatile, with the rupee depreciating by 11% during the quarter.

"We have an active hedging program to minimise its impact on our margins. We will continue our focus on optimizing costs and enhancing the efficiency of our operations.”