Infosys: Accelerated Double Digit Growth of 12.4%; Highest Ever Large Deal TCV at $ 2.7 Bn
BENGALURU,
41.9% YoY |
12.4% YoY |
2.8% QoQ |
20.50% |
|
Digital CC growth |
CC growth |
CC growth |
Operating margin |
Large deal signings |
- Q1 20 revenues grew year-on-year by 10.6% in USD; 12.4% in constant currency
- Q1 20 revenues grew sequentially by 2.3% in USD; 2.8% in constant currency
- Q1 20 Digital revenues at
$1,119 million (35.7% of total revenues), year-on-year growth of 41.9% and sequential growth of 8.6% in constant currency - Increased FY 20 revenue growth guidance range to 8.5%-10% in constant currency
- Maintained FY 20 operating margin guidance range of 21%-23%
1. Financial Highlights - Consolidated results under International Financial Reporting Standards (IFRS)
Revenues were
Operating profit was
"We had a good quarter as we continue to leverage our digital navigation framework to help our clients build and nurture their live enterprise," said
"Our first quarter results and continued focus on operational efficiencies gives us the confidence on our revenue and margin guidance for the year," said
2. Capital Allocation
- The Company is on track towards completing its previously announced share buyback of INR
8,260 crore . The company has till date bought back shares worth `INR5,934 crore . - The Company's current policy is to pay up to 70% of the free cash flow annually by way of dividend and/or buyback. The Board has reviewed and approved a revised Capital Allocation Policy of the Company after taking into consideration the strategic and operational cash requirements.
"Effective from Financial year 2020, the company expects to return approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback and/or special dividends, subject to applicable laws and requisite approvals, if any."
Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS
Dividend and buyback include applicable taxes
3. Client wins & Testimonials
- We were selected by Finnish postal service Posti as a strategic partner for the digital transformation of its business and IT services to drive the modernization of its IT applications and infrastructure, helping it move to a flexible IT service model. This will also strengthen Posti's ability to respond to changes in customer needs with agility and provide a seamless customer user experience through a dedicated command center.
- We entered into long term strategic partnership with
Toyota Material Handling Europe to help in its digital transformation journey by facilitating transformation to a scalable digital hybrid cloud platform, providing application services, digital workplace, infrastructure management and a dedicated data center operation. Infosys McCamish , a US based subsidiary ofInfosys BPM entered into a partnership withPan-American Life Insurance Group (PALIG), a leading provider of life, accident and health insurance to provide policy administration services for PALIG's new Global Assets Indexed Universal Life product.- We have partnered with a leading consumer technology company to help them localize their virtual assistant by training their AI.
Infosys is helping the client to define its overall global strategy for localization while analyzing data to identify patterns which can train the AI to respond better to the user command. This will improve their virtual assistant to provide a better user experience. Marc Schmidt , Head of SDD and GIT-ACI, BSH said, "At BSH GmbH , for the software Development Platform (SDD) which is used for developing thousands of micro to large scale applications, we wanted to deploy an auto-scaling Infrastructure on AWS Cloud that can handle millions of users across the world.Infosys leveraging its Agile and DevOps methodology and expertise, automated build and deployment which led to an overall 70% reduction in environment provisioning time, Zero downtime, 100% improvement in recovery time objectives."- One of the world leaders in the manufacturing of connectivity and sensor products engaged
Infosys to transform their delivery of Sales solutions needed for their globally dispersed sales team, leveraging Salesforce ecosystem.Infosys over the last 12 months has moved to a Highly Agile Capability based delivery model and helped in an estimated 40% improvement in time to market for solutions, shortened release cycles from once-a-quarter to on-demand releases and improvement in time to revenue of solutions by upto 25%
Recognitions
Infosys positioned in HFS Top 10 Healthcare Services 2019- Recognized as a Leader in
NelsonHall's SAP HANA and S/4HANA services report - Recognized as a Leader in the Enterprise Platform IT Services in BFS PEAK Matrix™ Assessment 2019
- Recognized in the HFS Top 10: Managed Security Services (MSS)
- Recognized in the HFS Top 10
Google AI Services - Recognized as a Leader in The Forrester Wave™: Global API Strategy And Delivery Service Providers, Q2 2019
- Recognized as a Leader in the NEAT on Next-Generation Software Testing Services
- Recognized as a Leader in the IDC MarketScape: Worldwide Microsoft Implementation Services 2019 Vendor Assessment
- Recognized in the NEAT on IoT in Digital Transformation
- Recognized in the HFS Top 10 Manufacturing Service Providers 2019
- Recognized in the HFS Top 10 Energy Services 2019
- Recognized as a Leader in Gartner Magic Quadrant for Public Cloud Infrastructure Managed Service Providers
- Awarded the "Most Valuable Partner – Commercial Cloud" Award by Oracle
- Won the Golden Peacock Environment Management Award
- Won the Pega partner excellence award in recognition of innovative practice development and continued investment in the growth of a strong delivery practice
- Recognized with the Global Partner of the Year Award for driving customer success at TIBCO NOW
- Recognized as MuleSoft Americas Growth & Emerging Partner of the Year 2019 by MuleSoft
- Awarded 'System Integrator Partner of the year 2019 for Hybrid Cloud Solutions' by HPE at HPE Discover 2019
About Infosys
Visit www.infosys.com to see how
Safe Harbor
Certain statements mentioned in this presentation concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in
Audited Condensed Consolidated Balance Sheet as at |
||
(Dollars in millions except equity share data) |
||
|
|
|
ASSETS |
||
Current assets |
||
Cash and cash equivalents |
2,266 |
2,829 |
Current investments |
778 |
958 |
Trade receivables |
2,290 |
2,144 |
Unbilled revenue |
964 |
777 |
Prepayments and other current assets |
851 |
827 |
Income tax assets |
38 |
61 |
Derivative financial instruments |
26 |
48 |
Total current assets |
7,213 |
7,644 |
Non-current assets |
||
Property, plant and equipment |
1,903 |
1,931 |
Right-of-use assets(B3) |
540 |
- |
|
589 |
512 |
Intangible assets |
207 |
100 |
Non-current investments |
548 |
670 |
Deferred income tax assets |
204 |
199 |
Income tax assets |
917 |
914 |
Other non-current assets |
296 |
282 |
Total non-current assets |
5,204 |
4,608 |
Total assets |
12,417 |
12,252 |
LIABILITIES AND EQUITY |
||
Current liabilities |
||
Trade payables |
317 |
239 |
Lease liabilities(B3) |
72 |
- |
Derivative financial instruments |
3 |
2 |
Current income tax liabilities |
305 |
227 |
Client deposits |
4 |
4 |
Unearned revenue |
408 |
406 |
Employee benefit obligations |
248 |
234 |
Provisions |
84 |
83 |
Other current liabilities |
2,022 |
1,498 |
Total current liabilities |
3,463 |
2,693 |
Non-current liabilities |
||
Lease liabilities(B3) |
483 |
- |
Deferred income tax liabilities |
112 |
98 |
Employee benefit obligations |
7 |
6 |
Other non-current liabilities |
115 |
55 |
Total liabilities |
4,180 |
2,852 |
Equity |
||
Share capital- INR 5 ( |
334 |
339 |
Share premium |
286 |
277 |
Retained earnings |
9,969 |
11,248 |
Cash flow hedge reserve |
- |
3 |
Other reserves |
432 |
384 |
Capital redemption reserve |
15 |
10 |
Other components of equity |
(2,854) |
(2,870) |
Total equity attributable to equity holders of the company |
8,182 |
9,391 |
Non-controlling interests |
55 |
9 |
Total equity |
8,237 |
9,400 |
Total liabilities and equity |
12,417 |
12,252 |
Audited Condensed Consolidated Statement of Comprehensive Income for the |
||
(Dollars in millions except equity share and per equity share data) |
||
Three months ended |
Three months ended |
|
Revenues |
3,131 |
2,831 |
Cost of sales |
2,122 |
1,819 |
Gross profit |
1,009 |
1,012 |
Operating expenses |
||
Selling and marketing expenses |
169 |
149 |
Administrative expenses |
198 |
193 |
Total operating expenses |
367 |
342 |
Operating profit |
642 |
670 |
Other income, net |
106 |
107 |
Finance cost(B3) |
(6) |
- |
Reduction in the fair value of |
- |
(39) |
Profit before income taxes |
742 |
738 |
Income tax expense |
196 |
204 |
Net profit |
546 |
534 |
Other comprehensive income |
||
Items that will not be reclassified subsequently to profit or loss: |
||
Re-measurements of the net defined benefit liability/asset, net |
(3) |
- |
(3) |
- |
|
Items that will be reclassified subsequently to profit or loss: |
||
Fair valuation of investments, net |
2 |
(7) |
Fair value changes on derivatives designated as cash flow hedge, net |
(3) |
1 |
Foreign currency translation |
17 |
(468) |
16 |
(474) |
|
Total other comprehensive income/(loss), net of tax |
13 |
(474) |
Total comprehensive income |
559 |
60 |
Profit attributable to: |
||
Owners of the Company |
546 |
534 |
Non-controlling interests |
- |
- |
546 |
534 |
|
Total comprehensive income attributable to: |
||
Owners of the Company |
559 |
60 |
Non-controlling interests |
- |
- |
559 |
60 |
|
Earnings per equity share(A2) |
||
Basic ($) |
0.13 |
0.12 |
Diluted ($) |
0.13 |
0.12 |
Weighted average equity shares used in computing earnings per equity share(A2) |
||
Basic |
4,302,176,860 |
4,346,657,242 |
Diluted |
4,308,286,160 |
4,350,710,356 |
NOTES:
A. Notes pertaining to previous quarters / periods
- In the three months ended
June 30, 2018 , the Company had recorded a reduction in the fair value amounting to$39 million in respect of its subsidiary Panaya. The subsidiaries Kallidus and Skava (together referred to as "Skava") and Panaya, are collectively referred to as the "Disposal Group ". Subsequently the company reclassified these subsidiaries as they did not meet the criteria for "Held for Sale". - Share numbers and EPS have been adjusted for
September 2018 bonus issue.
B. Notes pertaining to the current quarter
- The audited interim condensed consolidated Balance sheet and Statement of Comprehensive Income for the three months ended
June 30, 2019 have been taken on record at the Board meeting held onJuly 12, 2019 . - A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com.
- On account of adoption of IFRS 16- Leases effective
April 1, 2019 .
IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q1/Documents/IFRS-INR-press-release.pdf
Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2019-2020/q1/Documents/fact-sheet.pdf
Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg
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