Bengaluru: Infosys on Friday had good news for investors and employees in what’s usually a dull quarter for IT outsourcing companies, announcing a 13 per cent rise in third-quarter (October-December) profit, maintaining its earlier annual guidance of 7-9 per cent growth for the year ending March 2015, despite the impact of a strong dollar, and announcing 100 per cent variable payout (bonus) for the quarter to employees as CEO Vishal Sikka stepped up the charm offensive to curb the attrition rate at the company. The numbers sent Infosys shares up over five per cent to 2,073.60 on the BSE.
Beating expectations, Infosys reported a 13 per cent rise in Q3 net profit, year-on-year, to Rs 3,250 crore, helped by increase in business and clients from North America, as well as from India. Its revenue rose 5.9 per cent to Rs13,796 crore for the quarter as the company added 59 clients in the quarter. “It was quite a positive quarter for the company, in what is traditionally a lull ... That really tells us that the deal pipeline is strong. That was quite a surprise,” said Ankita Somani, tech analyst with MSFL Research.
Attrition, up slightly to 20.4 per cent in the quarter, remained a matter of concern for the company, even as CEO Sikka said he had seen the graph falling over the last two quarters in absolute termsfrom 10,600 in Q1 to 10,100 in Q2 to 8,900 in Q3. Infosys said it was using its workforce more efficiently, with a utilisation rate of 82.7 per cent, its highest in 11 years. “But we don’t want even 8,900 people to leave us in a quarter”, Mr Sikka added.
“We have made 100 per cent variable payout for Q3 and have seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters,” said U.B. Pravin Rao, Infosys’ COO. He said he expected attrition to fall to 13-15 per cent by the end of June 2015. Mr Sikka, who has bet on renewing Infosys’ traditional business lines while aggressively adding new technology capabilities, said: “We are excited by several breakthrough results in Q3. Our ‘renew and new’ strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption.”
