Infosys on the right track, Q1 profit grows 5%

Infosys posted its best results in the last 15 quarters, giving early indications that its first non-founder CEO Vishal Sikka’s vision for the company may actually be paying off.

The second-largest IT company in the country posted a seven per cent increase in revenues in the first quarter on a sequential basis though net profit fell by 2.1 per cent, largely because of salary hikes, currency volatility and investments. On a year-on-year basis, net profit grew 5 per cent to ₹3,030 crore on the back of a 12.4 per cent rise in revenues to ₹14,354 crore. “Efforts in redesigning clients’ experience and widespread adoption of innovation are starting to bear fruit,” said Sikka. Bourses reacted positively to the results with the scrip climbing to the day’s high of ₹1,115 (up 12.56 per cent) before ending the day 11 per cent higher at ₹1,112.65, the biggest gain since July 12, 2014.

Sikka, however, had a word of caution. He stated that “the quarter is a volatile animal.” But it did not prevent the company from raising revenue growth in dollar terms from 6.2-8.2 per cent previously to 7.2 -9.2 per cent for FY16.