Infosys Q3 profit rises 38 pc on tax reversal, maintains annual revenue guidance

Infosys, the country’s second-largest software maker, has recorded a 37.6 percent growth in net profit in the October-December quarter aided by a revival in the demand environment and a one-time tax reversal. The IT major registered a net profit of Rs 5,129 crore during the period, as compared with Rs 3,726 crore in the previous quarter.

The IT major has retained its full-year revenue growth guidance in constant currency terms at 5.5-6.5 percent and also maintained its EBIT margins at 23-25 percent. Revenues during the period rose 1.3 percent sequentially to Rs 17,794 crore. The company’s new CEO Salil Parekh said that operating margins stood at 24.3 percent.

CFO M D Ranganath said operating margins were stable on account of improved operational efficiency, even as the company’s shares price rose marginally on the BSE by 0.26 percent to Rs 1,078.40. The revenues were boosted by an improved performance in verticals such as retail and logistics and energy and utilities.

On account of the conclusion of an advance pricing agreement with the US Internal Revenue Service, the company reversed income tax expenses of around Rs 1,432 crore. As a result, the current tax expenses reduced to Rs 144 crore from Rs 1,471 crore, sequentially.

“Digital disruption is impacting our clients and that’s where we can help them,” said Parekh. AI, Machine Learning and IOT are going to be big opportunities going forward, he added.

The management added that the company has added one client in the $100 million band and three clients in the $75 million range. Total active clients increased to 1,191 at the end of December 2017, from 1,173 in September. Infosys said utilisation was at 84.9 percent for the quarter ended December 2017. Volume growth stood at 1.5 per ent for the quarter, while EBIT grew 1.7 percent to Rs 4,319 crore, sequentially.