CHENNAI: India’s second largest IT exporter Infosys on Friday reported an impressive 38.3 per cent growth in net profit at Rs 5,129 crore for the third quarter of FY18, helped by lower tax expenses.
The Bengaluru-based firm had reported Rs 3,708 crore profit in the year-ago period.
The growth in profit was mainly due to the conclusion of the advance pricing agreement with the US administration, which had led to reversal of income tax expense provision of Rs 1,432 crore and had positively impacted the margin by 100 basis points.
Revenues, too, grew three per cent to Rs 17,794 crore during the quarter under review against Rs 17,273 crore a year ago. The firm reported its slowest incremental revenue increase in four quarters for the September-December period, as its bread-and-butter BFSI business showed negative growth.
The company has been able to retain the operating margin in the target range of 23-25 per cent, at a time when higher top line growth is hard to come by.
In the December 2017 quarter, the firm reported 24.3 per cent margin compared with 24.2 per cent in the previous quarter.
This is the first quarterly results since Salil Parekh took charge as the new CEO and MD of Infosys on January 2. Infosys has managed to keep its attrition rate low in the December quarter, thanks to salary hikes and higher variables. Attrition declined to 15.8 per cent from 17.2 per cent in Q2. “During the quarter, we provided compensation increases and higher variable payouts to our employees. Our investment in employees continues to deliver results as reflected in lower attrition,” Infosys COO Pravin Rao said in the BSE filing.
Infosys also signalled a higher growth in digital technologies, joining larger rival Tata Consultancy Services in reporting this trend. Emerging services such as artificial intelligence, cloud and big data, among others, accounted for 11 per cent of total revenue.