BENGALURU: IT services firm Infosys, though missed market expectations, on Friday announced a 1:1 bonus issue and a stock dividend of one American Depositary Share (ADS) for every ADS held.
The board recommended a final dividend of `29.50 per share (equivalent to `14.75 per share after 1:1 bonus issue).
Releasing the fourth quarter earnings, the company reported a decline in sequential net profit and revenue. It reported a 2.6% decline in net profit even though the year-on-year growth was 3.6% for Q4 of FY15(2014-15) at ` 3,097 crore compared to `2,992 crore in the year ago period.
The company’s Q4 profit in dollar terms was down 4.6% to $498 million when compared to $522 million in Q3 FY15. Its revenue also saw a sequential decline to $2.159 billion from $2.218 billion in Q3 FY15.
However, net profit for the entire year was up 15.8% to `12.329 crore while revenue was up 6.4% to `53,319 crore. In dollar terms, net profit was up 15% to $2.013 billion while revenue was up 5.6% to $8.711 billion. The company’s cash and cash equivalents stood at `32,585 crore at the end of FY15.
The ‘lower than expected’ results saw its shares tank 5.95% at the BSE at `1,996.25. The company also saw its M-cap down to `14,504 crore.
The company had last seen such notional losses at the end of FY14 when its shares tanked 22% and M-cap dropped to `35,740 crore.
Topline growth (revenues) were up 4.2% to `13,411 crore from `12,875 crore in the corresponding quarter last fiscal. However, there was a sequential decline of 4.7% in revenue to `3,250 crore in Q3 (Oct-Dec) to Q4 (Jan-Mar) of FY15.
“We are expecting to grow at 10-12 per cent. We are targeting revenue of $20 billion by 2020. Our average revenue per employee is expected at $80,000 by 2020,” Vishal Sikka, CEO of the company said.
However, Infosys continued its ‘conservative outlook’, forecasting a growth of 10-12% (for FY16) in constant currency terms when compared to the Nasscom forecast of 12-14% for the sector.
“Despite being a challenging quarter, I am encouraged by the early successes in executing our Renew-New strategy, on a foundation of learning,” Sikka said.
“Services growth in the fourth quarter was lower than we expected,” UB Pravin Rao, Chief Operating Officer of Infosys said.
The company said that pricing continued to be under pressure due to increasing commoditisation in traditional outsourcing business.
“We were able to improve profitability during the year even as we made investments into our employees and other strategic areas. We have been able to achieve this because of increased operating efficiencies despite a difficult pricing environment,” Rajiv Bansal, Chief Financial Officer of the company said.
Quarterly annualised attrition fell to 13.4% for Infosys in Q4 FY15. Net additions for the year stood at 15,782 taking its total headcount to 1,76,187 at the end of March 31 2015.
Reacting to the results, Sarabjit Kour Nangra, Vice President (Research-IT) at Angel Broking said that the company posted “result below expectations”.