India's Infosys pulls in $519m Q2 profit

For the second quarter of 2015, Infosys posted a net profit of $519 million, and experienced the highest revenue growth the New York Stock Exchange-listed company has seen in 16 quarters.
Written by Asha Barbaschow, Contributor

For the three months ending September 30, Indian IT outsourcing company Infosys posted a net profit of $519 million, a 1.6 percent growth year-on-year.

In the second quarter of the year, Infosys' revenue grew 8.7 percent over Q2 last year, coming in at $2,392 million.

"We are experiencing a once-in-a-generation opportunity for a services company to help businesses maximise their potential with technology," CEO and managing director Vishal Sikka said.

One year on from his appointment as CEO, Sikka said his company is taking steps towards becoming a great services organisation, adding that he is encouraged by the company's progress.

"While results in any one quarter are transitory snapshots of a long journey, we do see our focused execution along our strategy starting to produce encouraging results for our clients, shareholders, and Infoscions."

Excluding its acquisitions, Infosys said its Q2 revenue growth was the highest it had experienced in 16 quarters; with the company's per capita revenue also increasing by 2.6 percent in reported terms. It also added 82 clients to its books, with the total number of clients pushing 1,000.

"We had strong all-round growth during the quarter, driven by recent initiatives around service differentiation, improvement in client mining, and higher focus on winning large deals," U. B. Pravin Rao, Infosys COO said. "Increase in revenue productivity was significant, volume growth was robust, client metrics and utilisation improved, while attrition remained stable."

Infosys said it spent $9 million in Q2 towards corporate social responsibility (CSR), which is primarily being carried out through the Infosys Foundation, its philanthropic arm. The foundation is engaged in several programs the company said is aimed at alleviating hunger, promoting education and computing literacy, improving health, assisting rural development, supporting arts, and helping the destitute.

Looking forward, the Bangalore-based company said it expects to post revenue growth of 6.4-8.4 percent in US terms, and 10-12 percent in constant currency, for the financial year ending March 31, 2016.

In August, Infosys announced a new set of new service offerings it said will help organisations jump start growth. The services are organised into three areas and named Ai Ki Dō, with the company saying the approach addresses enhanced service offerings in knowledge-based IT, platforms, and design thinking.

Earlier this year, Infosys acquired enterprise resource planning software company Panaya for $200 million as part of the company's plans to enhance its efforts to focus on cloud, big data, and artificial intelligence.

"The acquisition of Panaya is a key step in renewing and differentiating our service lines. This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients," Sikka said in February.

"At the same time, Panaya's proven technology helps dramatically simplify the costs and complexities faced by businesses in managing their enterprise application landscapes."

Throughout the quarter, Infosys signed many deals including: A three-year agreement with TOMS Shoes to become its worldwide partner to maintain and develop its digital platform; an agreement with ABB -- ASEA Brown Boveri -- a Swiss high-tech engineering firm dealing mainly in robotics, power, and automation to implement its global product compliance program; and an omni-channel solution implemented with Saks Fifth Avenue to help improve its digital commerce business.

Infosys Finacle, a banking solution from EdgeVerve Systems, a wholly owned subsidiary of Infosys, was signed by Qantas Credit Union last month in a three-year deal that would see EdgeVerve provide Finacle "as-a-service" to the credit union through its cloud-hosted business platforms.

The New South Wales government handed its ServiceFirst cloud deployment over to Infosys and Unisys in June, in a six-year contract that will see the pair provide end-to-end outsourced IT services to the government initiative.

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