Infy beats estimates as Q2 net up 6% at $511m





Declares 1:1 Bonus In Auspicious Start For Sikka

Vishal Sikka has had an auspicious start at Infosys. His first quarterly results as CEO of the company came in better than expected and, combined with a 1:1 bonus issue and a Rs 30 per share interim dividend, sent the share price up by 6.5% on the Bombay Stock Exchange on Friday -a day when the broader sensex fell.

In a bonus issue, there is no addition of wealth for any shareholder. But since it makes the shares more affordable and accessible to retail investors, it could increase demand, which in turn could exert an upward pressure on the share price.

Infosys' revenue in the quarter ended September was up 3.1% at $2.2 billion, compared to the preceding one, and was up 6.5% compared to the same period last year. That was mostly in line with analysts' expectations, but is still below the 7-9% guidance that Infosys has provided for the full year, and means that growth rates in the next two quarters have to be higher to meet the guidance.

The firm's net profit, however, was much higher than expected. It rose 6% to $511 mil lion in the quarter, compared to the first quarter, and 33.4% compared to the year-ago period. The operating margin improved by 100 basis points to 26%. It was 21.9% a year ago.

Sikka, who took over as the first non-founder CEO of Infosys on August 1, said he was overhauling existing services and creating new ones based on a host of new technologies that have emerged in areas such as automation, artificial intelligence, cloud, mobility , analytics and sensors. "Infosys has to amplify the abilities of clients, not just augment them," he said.

Digital transformation, he said, was reshaping the business of every one of Infosys' clients. "We see this as a great opportunity to help them renew the core of their business as well as to expand into new frontiers and are seeing early positive results," he said. He said it may take two-three years for the strategy to make visible a meaningful impact. Today, when the headlines are about twenty-something digital millionaires who raise billions for their fledgling web enterprises which are yet to make any money, it is easy to forget that their success has been built on the foundation laid by companies like Infosys which, in a sense, started it all in Bangalore. The technology revolution of India has many fathers but the one that caught the public imagination and grabbed global headlines and positioned India as a tech power was Infosys.With all the founders having exited the company, TOI brings you pictures from their long, illustrious journey