Infosys (NYSE: INFY) Announces Results for the Quarter ended September
30, 2013
Q2 revenues grew by 15.0% year-on-year; 3.8% quarter-on-quarter
Bangalore, India - October 11, 2013
Financial Highlights
Consolidated results under International Financial Reporting Standards
(IFRS) for the quarter ended September 30, 2013
- Revenues were $2,066 million for the quarter ended September 30, 2013
QoQ growth was 3.8%
YoY growth was 15.0%
- Net profit was $383 million for the quarter ended September 30, 2013
QoQ decline was 8.4%
YoY decline was 11.1%
- Earnings per American Depositary Share (EPADS) was $0.67 for the quarter
ended September 30, 2013 QoQ decline was 8.2%
YoY decline was 10.7%
EPADS for the quarter ended September 30, 2013 is $0.73 per share,
excluding the provision of $35m for visa related matters. EPADS for the
quarter is $0.67 per share, including the provision of $35m for visa related
matters. The difference is $0.06 per share.
- Liquid assets including cash and cash equivalents, available-for-sale
financial assets, and government bonds were $4.3 billion as on September 30,
2013 versus $4.1 billion as on June 30, 2013
Other highlights:
- Infosys and its subsidiaries added 68 clients during the quarter
- Gross addition of 12,168 employees (net addition of 2,964) for the quarter
by Infosys and its subsidiaries
- 160,227 employees as on September 30, 2013 for Infosys and its subsidiaries
- Declared an interim dividend of `20 per ADS (equivalent to an interim
dividend of $0.32 per ADS, at the prevailing exchange rate of `62.61 per US$).
The record date for the payment of dividend is October 18, 2013
"During the quarter we witnessed broad-based volume growth, robust client
additions, five large deal wins and increased sales momentum of our big data
and cloud offerings. This growth is a result of our focus on execution, which
helps our clients achieve their objectives." said S. D. Shibulal, CEO and
Managing Director. "We will continue with planned investments and initiatives
to explore new avenues of growth. We remain watchful of the sustainability of
improving global economic fundamentals", he added.
"The global currency market remains volatile with the Indian Rupee
depreciating by 11% during the quarter. We have an active hedging program to
minimize its impact on our margins. We will continue our focus on optimizing
costs and enhancing the efficiency of our operations," said Rajiv Bansal,
Chief Financial Officer.
Outlook
The company's outlook (consolidated) for the fiscal year ending March
31, 2014, under IFRS is as follows:
- Revenues are expected to grow 9% to 10%;
Business Highlights
- We are pursuing and winning large outsourcing deals. Service innovations
like Global Agile, Virtual Operations and Integrated Application Management
continue to provide high levels of differentiation for us in the marketplace
and have enabled wins across industry verticals. We have recently entered into
a four-year engagement with Toyota Motor Europe to manage its Pan-European
application support. This contract covers key operational areas including core
automotive processes and corporate functions, under a managed service model.
- On the Business Transformation front, we have enhanced our scale in emerging
markets and our non-linear revenues by leveraging new business models and
pricing structures. We continue to leverage our alliances and are driving
innovation through industry leading intellectual property and solutions.
- We continue to strengthen our competencies in Oracle and SAP practices. We
have been rated as a leader in Gartner's Magic Quadrant for Oracle Application
Implementation and Application Management Services, and for SAP Application
Management services.
- Our Products and Platforms business continues to grow at a steady pace with
15 wins this quarter (excluding Finacle™).
- Finacle™ had 18 new wins across South Asia, South East Asia, the Middle
East, Europe, and Australia-New Zealand this quarter. We launched Finacle 11E,
the enterprise edition of Finacle™ universal banking solution. Finacle 11E is
designed to simplify banking transformation with enterprise-class components.
- We are building momentum in the market with our Cloud and Big Data
offerings. Last quarter, we won over 15 new projects with clients in these
segments. We are a leader in Cloud services with more than 4,500 Cloud
experts, 200 engagements and 35 partners. This was validated by IDC's
recognition of Infosys as a Major Player in its IDC MarketScape for Cloud
Professional Services.
- We are engaging with clients to create innovative solutions around the
mobile device. This quarter we began over 25 different engagements in various
areas such as Mobile strategy consulting, Mobile field service, customer
engagement, and enterprise productivity, among others.
- In the U.S., we are partnering with leading healthcare and public sector
organizations through Infosys Public Services Inc., to help them deliver
patient-centric care and mission outcomes. A Blue Cross Blue Shield Plan
awarded us a three year managed services contract to support its IT operations
and provide application maintenance and testing services. This will enable the
client to optimize efficiency and cost while delivering enhanced care and
services to members. We have also been selected by a multi-state
Medicaid/Medicare Plan to implement a solution that meets shared member
liability management requirements, as mandated for participation in health
exchanges under the U.S. Affordable Care Act.
- During the second quarter, Infosys applied for 21 unique patent applications
in India and the U.S. With this, we have 536 patent applications undergoing
various stages of patent prosecution in India, the U.S. and other
jurisdictions. We have been granted 119 patents by the United States Patent
and Trademark Office and 3 patents by the Luxembourg patent office.
Awards and Recognition
- Infosys topped the 2013 Institutional Investor Rankings among all Indian
companies across sectors.
- Finacle™ won the prestigious Best Core Banking Technology award in the
Innovation in Technology and Transaction Banking Awards 2013, organized by The
Banker (a Financial Times publication).
- Infosys China was recognized among the `2013 Top 10 Global Services
Providers' in China at the 5th Annual China Sourcing Summit.
- Infosys Public Services Inc. has been named in the `Healthcare's Hottest
Companies for 2013' list by Modern Healthcare, a leading healthcare
publication for senior decision-makers.
About Infosys Ltd
Infosys is a global leader in consulting, technology and outsourcing
solutions. We enable clients, in more than 30 countries, to stay a step ahead
of emerging business trends and outperform the competition. We help them
transform and thrive in a changing world by co-creating breakthrough solutions
that combine strategic insights and execution excellence.
Visit www.infosys.com to see how Infosys (NYSE: INFY), with US$7.4 billion in
annual revenues and 160,000+ employees, is Building Tomorrow's Enterprise®
today.
Safe Harbor
Certain statements in this release concerning our future growth prospects are
forward-looking statements, 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 India, our ability to
attract and retain highly skilled professionals, time and cost overruns on
fixed-price, fixed-time frame contracts, client concentration, restrictions on
immigration, industry segment concentration, our ability to manage our
international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks or system failures, our
ability to successfully complete and integrate potential acquisitions,
liability for damages on our service contracts, the success of the companies
in which Infosys has made strategic investments, withdrawal or expiration of
governmental fiscal incentives, political instability and regional conflicts,
legal restrictions on raising capital or acquiring companies outside India,
and unauthorized use of our intellectual property and general economic
conditions affecting our industry. Additional risks that could affect our
future operating results are more fully described in our United States
Securities and Exchange Commission filings including our Annual Report on Form
20-F for the fiscal year ended March 31, 2013 and on Form 6-K for the quarter
ended June 30, 2013. These filings are available at www.sec.gov. Infosys may,
from time to time, make additional written and oral forward-looking
statements, including statements contained in the company's filings with the
Securities and Exchange Commission and our reports to shareholders. The
company does not undertake to update any forward-looking statements that may
be made from time to time by or on behalf of the company unless it is required
by law.
Contact
Investor Gargi Ray, India Sandeep Mahindroo, US
Relations
+91 80 4116 7747 +1 (646) 254 3133
gargi_ray@infosys.com Sandeep_Mahindroo@infosys.com
Media Sarah Vanita Gideon, Ken Montgomery, Golin Harris, US
Relations India
+91 (80) 4156 3373 +1 (415) 318 4399
Sarah_Gideon@Infosys.com KMontgomery@GolinHarris.com
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Balance Sheets as of
(Dollars in millions except share data)
September 30, 2013 March 31, 2013
ASSETS
Current assets
Cash and cash equivalents $3,601 $4,021
Available-for-sale financial assets 448 320
Investment in certificates of deposit 84 -
Trade receivables 1,333 1,305
Unbilled revenue 503 449
Derivative financial instruments - 19
Prepayments and other current assets 389 391
Total current assets 6,358 6,505
Non-current assets
Property, plant and equipment 1,120 1,191
Goodwill 352 364
Intangible assets 62 68
Available-for-sale financial assets 165 72
Deferred income tax assets 88 94
Income tax assets 222 201
Other non-current assets 30 44
Total non-current assets 2,039 2,034
Total assets $8,397 $8,539
LIABILITIES AND EQUITY
Current liabilities
Derivative financial instruments $72 -
Trade payables 16 35
Current income tax liabilities 305 245
Client deposits 3 6
Unearned revenue 135 152
Employee benefit obligations 142 113
Provisions 71 39
Other current liabilities 698 568
Total current liabilities 1,442 1,158
Non-current liabilities
Deferred income tax liabilities 11 23
Other non-current liabilities 44 27
Total liabilities 1,497 1,208
Equity
Share capital- `5 ($0.16) par value 600,000,000 equity shares
authorized, issued and outstanding 571,402,566 each, net of
2,833,600 treasury shares each as of September 30, 2013 and
March 31, 2013, respectively 64 64
Share premium 704 704
Retained earnings 8,159 7,666
Other components of equity (2,027) (1,103)
Total equity attributable to equity holders of the 6,900 7,331
company
Non-controlling interests - -
Total equity 6,900 7,331
Total liabilities and equity $8,397 $8,539
Infosys Limited and subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Dollars in millions except share and per equity share data)
Three months Three months Six months Six months
ended ended ended ended
September 30, September 30, September 30, September 30,
2013 2012 2013 2012
Revenues $2,066 $1,797 $4,057 $3,549
Cost of sales 1,337 1,114 2,633 2,173
Gross profit 729 683 1,424 1,376
Operating expenses:
Selling and marketing expenses 120 92 223 178
Administrative expenses* 158 119 282 237
Total operating expenses 278 211 505 415
Operating profit 451 472 919 961
Other income, net 81 129 184 216
Profit before income taxes 532 601 1,103 1,177
Income tax expense 149 170 302 330
Net profit $383 $431 $801 $847
Other comprehensive income
Items that will not be reclassified to
profit or loss
Re-measurement of the net defined $5 - $6 -
benefit liability/(asset)
Items that may be reclassified
subsequently to profit or loss
Fair value changes on available-for-sale ($4) $1 ($4) -
financial asset, net of tax effect
Exchange differences on translating (316) 324 (935) (228)
foreign operations
Total other comprehensive income ($315) $325 ($933) ($228)
Total comprehensive income $68 $756 ($132) $619
Profit attributable to:
Owners of the company $383 $431 $801 $847
Non-controlling interests - - - -
$383 $431 $801 $847
Total comprehensive income
attributable to:
Owners of the company $68 $756 ($132) $619
Non-controlling interests - - - -
$68 $756 ($132) $619
Earnings per equity share
Basic ($) 0.67 0.75 1.40 1.48
Diluted ($) 0.67 0.75 1.40 1.48
(*) Administrative expenses for quarter and half year ended September
30, 2013 include a provision of $ 35 million towards visa related matters.
NOTE:
1. The unaudited Condensed Consolidated Balance sheets and
Condensed Consolidated Statements of Comprehensive Income for the three months
and six months ended September 30, 2013 has been taken on record at the Board
meeting held on October 11, 2013
2. A Fact Sheet providing the operating metrics of the company can be
downloaded from www.infosys.com