Infosys ups guidance on Q2 growth

Buoyant 3.8 percent volume growth and robust client additions in the July-Sep second quarter have made IT bellwether Infosys Ltd again revise its revenue guidance upwards in rupee and dollar terms for the 2013-14 fiscal.

"Consolidated revenue for the fiscal under review will grow 21-22 percent year-on-year (YoY) in rupee terms and 9-10 percent (YoY) in dollar terms, with dollar conversion at Rs.62.61 for the rest of the fiscal year," the company said in a statement here Friday.

The guidance has been revised upwards from 13-17 percent in rupee terms and 6-10 percent in dollar terms the company gave July 11 when dollar traded at Rs.59.39.

"During the quarter under review (Q2), we witnessed broad-based volume growth, robust client additions, five large deal wins and increased sales momentum of our big data and cloud offerings," Infosys chief executive S.D. Shibulal said here.

The company and its subsidiaries 68 clients during the quarter as against 39 in same period a year ago and 66 in first quarter (April-June) of this fiscal, taking the number of active clients to 873 from 715 year ago and 836 in previous quarter (Q1).

In a regulatory filing to the stock exchanges earlier in the day, the global software major reported Rs.2,407 crore net profit for second quarter, posting a marginal increase of 1.6 percent year-on-year (YoY), as per the Indian accounting standard.

Consolidated revenue, however, jumped 31.5 percent YoY to Rs.12,965 crore (Rs.130 billion).

Sequentially, net profit grew 1.4 percent and revenue 15.1 percent from first quarter (April-June) of this fiscal.

Under the International Financial Reporting Standard (IFRS) net income declined 11.1 percent YoY to $383 million though revenue grew 15 percent YoY to $2.07 billion.

"The global currency market remains volatile with the rupee depreciating 11 percent during the quarter though we have an active hedging programme to minimise its impact on our margins," company's chief financial officer Rajiv Bansal said.

Provision of $35 million for its legal case on the alleged violation of US visa rules impacted the net income in dollar terms during the quarter.

"As we are engaged with the US attorney's office on a civil resolution of its government's investigation into our compliance with Form I-9 and past use of B-1 visas, we have set aside a reserve of $35 million, including legal costs," Shibulal said.

The US immigration authorities issues B-1 visas for short-term visits to attend business seminars and restrict employees from engaging in gainful employment during their stay.

A district court in Texas, however, served a legal notice May 23, 2011 on the alleged misuse of B-1 visa rules by the company in past.

In a related development, the company declared a whopping 400 percent interim dividend of Rs.20 per share of Rs.5 value to its investors ahead of the festival season.

"The board of directors has approved an interim dividend of Rs.20 per share for the first six months (April-Sept) of this fiscal," the statement noted.

Though the company added 12,168 people in the quarter, exit of 9,204 employees in the same period led to net addition of only 2,964 techies.

As a result, the company had 160,227 employees at the end of second quarter as against 153,761 in same period year ago and 157,263 quarter ago.