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Infosys Q4 profit dips marginally to Rs 4321 cr; skips FY21 guidance due to Covid-19

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Infosys said its consolidated net profit (after minority interest) fell 3.1% to Rs 4,321 crore on 0.8% rise in revenues to Rs 23,267 crore in Q4 March 2020 over Q3 December 2019.

On a consolidated basis, operating profit fell 2.7% to 4,927 crore in Q4 March 2020 over Q3 December 2019. Operating margin stood at 21.2% in Q4 March 2020 lower than 21.9% in Q3 December 2019. The result was announced after trading hours on Monday, 20 April 2020.

"Considering the business uncertainty emanating from COVID-19, the company is unable to provide guidance on revenues and margins for FY 21 at this stage. The company will provide guidance after visibility improves," Infosys said in a release.

Digital revenues stood at $1,341 million (41.9% of total revenues) in Q4 March 2020, year-on-year growth of 31.7% and sequential growth of 2.6% in constant currency.

Infosys' consolidated net profit (after minority interest) rose 7.7% to Rs 16,594 crore on 9.8% rise in revenues to Rs 90,791 crore in the year ended March 2020 (FY20) over the year ended March 2019 (FY19). Operating margin stood at 21.3% in FY20, lower than 22.8% in FY19. Infosys announced final dividend of Rs 9.50 per share.

"We had an exceptional year in financial year 2020 with growth of 9.8% and operating margin of 21.3%. While the immediate short-term will be challenging, looking ahead, we can see that there is a strong interest to consolidate with partners with high-quality and agile service delivery and strong financial resilience. I am confident we will emerge from this stronger," said Salil Parekh, CEO and MD.

"We completed a satisfying year on multiple counts -growth in all verticals and geographies, significant increase in large deal wins, good client mining and operational discipline," said Pravin Rao, COO. "The impact caused by COVID-19 since last few weeks of March has led to significant displacement in the operating model while severely testing business continuity plans of companies."

"We continue to remain focused on execution excellence in a period of high uncertainty. Our relentless focus on liquidity will be supported by our strong balance sheet of $3.6 billion cash, backed by accelerated cost take-outs and operational rigor," said Nilanjan Roy, CFO. "The final dividend of Rs 9.50 per share is a testimony of a strong free cash flow performance for FY 20."

Infosys said it is resilient and prepared to navigate the COVID-19 impact for its employees, clients and stakeholders. The IT major said that with some impact due to project deferrals and softening of discretionary spends, there will be some margin pressure in the near term. In response to these new contours of projected demand, Infosys will work to optimize its cost structure and operational rigor, while continuing to invest in strengthening its digital capabilities. Infosys said it intends to not only nurture its vast pool of digital talent in a high-productivity environment, but also honor the job offers it has extended to the markets, in order to enhance the skill-sets it can bring to recovery-focused client environments.

The company had approximately $3.605 billion (Rs 27,276 crore) in cash and cash equivalents including investments with zero debt as of 31 March 2020.

Attrition rate for Q4 March 2020 stood at 20.7% against 20.4% last fiscal. Infosys had 2,42,371 employees as of 31 March 2020, against 2,28,123 in the same period last year.

In its update on whistleblower matters, Infosys said the audit committee appointed an external legal counsel to conduct an independent investigation into the whistleblower allegations which have been previously disclosed to stock exchanges on October 22, 2019 and to the Securities Exchange Commission (SEC) on Form 6-K on the same date. As previously disclosed on January 10, 2020 the outcome of the investigation has not resulted in restatement of previously issued financial statements.

The company cooperated with an investigation by the SEC regarding the same matters. In March 2020, the company received notification from the SEC that the SEC has concluded its investigation and the Company does not anticipate any further action by the SEC on this matter. The Company is responding to all the inquires received from the Indian regulatory authorities and will continue to cooperate with the authorities for any additional requests for information. Additionally, in October 2019, a shareholder class action lawsuit was filed in the United States District Court for the Eastern District of New York against the company and certain of its current and former officers for alleged violations of the US federal Securities Laws. The company is presently unable to predict the scope, duration or the outcome of these matters.

Infosys is a global leader in next-generation digital services and consulting.

Shares of Infosys rose 3.75% to end at Rs 652.9 on BSE in today's session. The stock moved in the range of Rs 639.30 to Rs 660.70.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, April 20 2020. 17:43 IST