Infosys quarterly profit dips
Dr. Vishal Sikka, CEO of Infosys
Financial systems vendor Infosys has reported a fall in profit for Q1 2016 due to slower than expected project ramp-ups on deals it had won in previous quarters.
For the quarter ended 30 June 2016, net profit was $511 million – a quarter-on-quarter (QoQ) decline of 4.1%, but a year-on-year (YoY) growth of 7.4%. Operating profit was also down – $602 million for the quarter. This equates to a QoQ drop of 3.7%, but a YoY increase of 11.3%.
Revenues were up – standing at $2.5 billion for the quarter. Meaning a QoQ growth of 2.2% in reported terms; 1.7% in constant currency terms. YoY growth was also healthy – 10.9% in reported terms; 12.1% in constant currency terms. In contrast, for the full year 2016, revenue and profits all increased.
Dr. Vishal Sikka, CEO at Infosys, says: “We had unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals that we had won in earlier quarters, resulting in a lower than expected growth in Q1.”
Despite the fall in profit, Sikka remains “encouraged” and points to new clients and the April launch of Mana, its knowledge-based artificial intelligence platform for business processes.
In terms of its outlook, Infosys says for the fiscal year ending 31 March 2017 (under IFRS); revenues are expected to grow 10.5%-12.0% in constant currency.
UPDATE 20 July 2016
Commenting on the results, Sikka sent an email to Infosys employees, where he expressed that he was “disappointed” with the firm’s recent results.
He says: “I am disappointed. Disappointed that our revenue performance was not what we could have delivered.”
The full (and lengthy) letter can easily be found online but does not contain much else of interest.
From silence to Myanmar
There have been a number of recent deals for Infosys.
Goldman Sachs launched a new digital bank, GS Bank, and is understood to be working with Infosys and its EdgeVerve division on this project, with the vendor’s e-Finacle platform as the underlying tech for GS Bank. However, Infosys’ spokesperson provided a “no comment” to Banking Technology.
Infosys was awarded a five-year contract with Commerzbank to remodel its investment banking IT architecture.
Infosys Finacle and software firm Onegini announced they are partnering to integrate Onegini’s mobile security platform with Finacle banking solutions.
Asia Green Development (AGD) Bank, one of the first commercially owned banks in Myanmar, reported it was automating its ops with Infosys’ Finacle core banking system.
