Besides The Upheaval at The Top, it has been a Defining year for Infosys, which saw some Welcome Growth in Revenue Terms. However, Rupee EPS Guidance is a Concern
On certain critical counts, it has been a defining year for Infosys, in good ways as well as not-so-good ones. The exit of T. V. Mohandas Pai, member of the board and Director - HR, who had served the company for 17 glorious years, was a setback enough. Matters became worse when Pai began to talk about the preference of Infosys for experience over professionalism when it came to hiring people or moving them up the ladder. For a company where the founders hold hardly around 10% of the shares, it was a serious allegation indeed. That was like suggesting that Infosys wasn’t the ultimate case study when it came to successful separation of ownership vs management, at least not to the extent to which it is perceived to be.
On the financial front, the company posted revenues of Rs.275.01 billion, which was a growth of around 20.9% yoy. Net profits grew by a far more modest 9.7% yoy to reach Rs.68.23 billion. In particular, the company missed its estimate for the fourth quarter, wherein revenue grew by 1.1% sequentially in dollar terms to reach $1.6 billion. The company still faces some instable conditions in the US market and revealed that clients were slow in taking decisions especially in the fourth quarter. There is a disappointment with the rupee EPS guidance as well, which is between Rs.126.05 and Rs.128.21, a growth of 5.5-7.3% yoy. In a statement during the conference call, CEO Kris Gopalakrishnan commented, “Rupee guidance is muted as it is a reflection of the dollar guidance. We look at the appreciation of the rupee and then we translate that.” In addition, the company has hired some 43000 employees this fiscal. Administrative expenses rose by a significant 21.07% yoy to Rs.19.71 billion for the past fiscal. Mostly though, Infosys has had a much better growth compared to last fiscal, when revenue grew by just around 3.5% yoy and net profit grew by 3.6% yoy. In terms of shareholder satisfaction, the company ranks 6th in B&E ‘s list of India’s top wealth creators in terms of absolute increase in mcap of Rs.325.44 billion yoy. But since April 15 when the quarterly results were announced, the company’s share price has been severely hit. Infosys opened April 15 at Rs.3,296.15 and closed 9.67% lower at Rs.2,980.70 on the same day.
On the financial front, the company posted revenues of Rs.275.01 billion, which was a growth of around 20.9% yoy. Net profits grew by a far more modest 9.7% yoy to reach Rs.68.23 billion. In particular, the company missed its estimate for the fourth quarter, wherein revenue grew by 1.1% sequentially in dollar terms to reach $1.6 billion. The company still faces some instable conditions in the US market and revealed that clients were slow in taking decisions especially in the fourth quarter. There is a disappointment with the rupee EPS guidance as well, which is between Rs.126.05 and Rs.128.21, a growth of 5.5-7.3% yoy. In a statement during the conference call, CEO Kris Gopalakrishnan commented, “Rupee guidance is muted as it is a reflection of the dollar guidance. We look at the appreciation of the rupee and then we translate that.” In addition, the company has hired some 43000 employees this fiscal. Administrative expenses rose by a significant 21.07% yoy to Rs.19.71 billion for the past fiscal. Mostly though, Infosys has had a much better growth compared to last fiscal, when revenue grew by just around 3.5% yoy and net profit grew by 3.6% yoy. In terms of shareholder satisfaction, the company ranks 6th in B&E ‘s list of India’s top wealth creators in terms of absolute increase in mcap of Rs.325.44 billion yoy. But since April 15 when the quarterly results were announced, the company’s share price has been severely hit. Infosys opened April 15 at Rs.3,296.15 and closed 9.67% lower at Rs.2,980.70 on the same day.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
