Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

Infosys' profit grows on cost cutting, offshore work

The company has restructured its management to return to high growth

Article comments

Indian outsourcer Infosys saw its profit rise in the fourth quarter as a result of cost cutting and productivity improvement measures, including doing more work offshore in India.

The company reported Friday that its profit was US$463 million, up 6.7 percent from the same quarter last year under IFRS (International Financial Reporting Standards). The company's profit had dropped by 11 percent year-on-year in the third quarter.

Revenue for the fourth quarter was also up, by around 10 percent, to $2.1 billion.

CEO S.D. Shibulal said in an earnings webcast that the business environment has improved, though marginally. Client budgets are stable, but customers are looking for cost optimization, which challenges the company to come up with newer services.

Infosys raised its revenue growth forecast for the its fiscal year ending March 31 to up to 12 percent. It had forecast revenue growth of 9 percent to 10 percent for the fiscal year when reporting results for the third quarter in October.

The company's revenue growth in rupees was higher at 25 percent, while profit grew by over 21 percent, in part because of a weaker Indian rupee against the U.S dollar.

Infosys' margins in the quarter were above expectations, and came mainly from reduced staffing and selling and marketing expenses, according to Dipen Shah, analyst at Kotak Securities. The company's staff attrition rate at beyond 18 percent annualized was a cause for concern, he said.

The company continues to restructure its management, some of it driven by the exit of some key staff. In January, it added a tier of two presidents, reporting to Shibulal, to run the business portfolios. The company has in addition an executive chairman and an executive vice chairman.

The number of staff at Infosys was down by close to 2,000, taking the total to 158,404 employees at the end of the quarter. The number of active clients in the quarter was 888, up from 873 in the previous quarter.

North America remains the largest market for Infosys, accounting for 60 percent of revenue, with Europe accounting for around 25 percent.

Infosys has been trailing larger rival Tata Consultancy Services for a number of quarters, leading the company's co-founder and first CEO, N.R. Narayana Murthy, to return as its executive chairman in June last year.

Infosys continues to invest in technologies that can be reused across a number of customers. It launched in December its TradeEdge, a sales platform to help global brands manage distribution and retail in emerging markets.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *