Infy Q4 up 2.4%; new CEO Salil Parekh charts out roadmap

Infosys Q4 net up 2.4 per cent

Software major Infosys on Friday chose to sell off its subsidiaries Panaya and Skava, which includes Kallidus, by March 2019. "We will execute our strategy around the four pillars of Scaling our Agile Digital business which is today United States dollars 2.79 billion in revenue, Energizing our client's Core technology landscape via AI and automation, Re-skilling our employees, and Expanding our localization in markets such as US, Europe, and Australia". In constant currency terms, Infosys managed a 5.8% growth, which was lower than industry body Nasscom's estimate of 7.8% growth past year.

Infosys Ltd, India's second-biggest software services exporter, posted a 2.4 percent rise in its fourth-quarter net profit, roughly in line with analysts' estimates.

"The acquisition fits into the digital scale up for us".

However, it revised the EBIT margin guidance downwards to 22-24 percent from 23-25 percent.

Dollar revenue growth was at 1.8 percent and in constant currency terms it was 0.6 percent. Employee utilization remained healthy, " said Pravin Rao, COO. In fiscal 2017, it reported profit of Rs 14,353 crore on revenue of Rs 68,484 crore.

The Bengaluru-headquartered company said it has written off $90 million in Panaya on a standalone basis, which is almost half of the $200 million that it had paid to acquire the Israeli software firm in February 2015. The company expects the sale to be completed by March 2019.

Besides, the Board has appointed Kiran Mazumdar-Shaw, Independent Director as the Lead Independent Director of the Board.

The company was also under fire from its founders a year ago over the Panaya deal, when the latter had questioned corporate governance practices related to the deal.

Some analysts believe that Infosys's decision to lower its profitability may not cheer the market in the short term but helps the company in the long run as it allows it to win more business when commoditized projects are increasingly seeing pricing pressure.

"The company has initiated identification and evaluation of potential buyers for Panaya and Skava following a strategic review of its businesses", said the IT major in a statement. "Navigating Your Next" is our aspiration of how we will partner with each one of our clients." said Salil Parekh, CEO. Operating margins stood at 24.3%.

Infosys explained that during the December 2017 quarter, it had signed an Advance Pricing Agreement with the United States administration that had led to reversal of income tax expense provision of Rs 1,432 crore. The IT firm said it would stick to its policy of returning up to 70 per cent of its free cash, adding that it had identified up to Rs 130 billion which would be paid to shareholders including a special dividend payout worth Rs 26 billion. Ranganath said the firm was generating higher margins in digital deals and is looking to sustain this over the coming months.

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