Infosys topline growth is slowing, once again
ET Intelligence Group: A fallout of churn in the top management at Infosys seems to be visible in the form of slowing revenue growth. After its third quarter results on Friday, the company’s revenue in the nine months to December 2017 grew at a slower pace of 6.5 per cent to $ 8,134 million compared with the 8.3 per cent increase in the corresponding period of the previous fiscal. This raises the possibility that the company will grow at a slower pace in FY18 than the 7.4per cent topline growth in the previous fiscal.
Though its net profit shot up by 37.6 per cent in the December quarter to Rs 5,129 crore, the jump was largely due to reversal of income tax provision of Rs 1,432 crore made in the prior period in the US. In the absence of such an adjustment, the net profit would have fallen by 0.8 per cent to Rs 3,697 crore sequentially.
The slower growth, however, masks the company’s sustained trend in strong client addition. The country’s second largest software exporter added 79 clients in the December 2017 quarter compared with 72 new clients in the previous quarter and 77 in the year-ago quarter. It added one client in the above $100 million billing bracket and three in the above $75 million bracket.
After a drop of 1,389 in the previous quarter, the employee base increased by 1,928 in the third quarter to 2,01,691. It still continues to be lower compared with the quarterly increase seen in the past.
Similar to its top peer Tata Consultancy Services, Infosys too reported dismal growth in the US market and in the banking, financial services and insurance (BFSI) in the December quarter. Infosys’s results were declared after the end of Friday’s trading session. When the trading resumes on Monday, the stock may show weakness following lacklustre quarterly performance.
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Via:: Economic Times – Stocks