Infosys guides for FY18 growth of 6.5-8.5% in constant currency

Infosys Q4 results

Infosys Ltd said it expects its revenue to grow by a modest 6.5-8.5%, stripped off the impact of currency movements, in the year that started this month.

The street was expecting a guidance of 7-9% growth.

The guidance is well below the traditional guidance range of low two digit percentages. Last year, it had guided for a growth of 11.8-13.8%. However, the company was expected to temper the guidance due to the overall disruption in the IT services market due to the emergence of new technologies such as automation and artificial intelligence.

In terms of rupee revenue, the guidance for 2018 is 2.5%-4.5%, based on the exchange rates as of March 31,
2017, it said.

The stock was down 1.5% on the NSE today morning.

“Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance. At the same time, we continued to see many positive signs of our strategy execution; our software-led offerings continued to show strong momentum and client success, with continued adoption of Mana, our AI platform; Zero Distance marked its 2-year anniversary as a grassroots cultural movement for innovation with strong client resonance, and our employee engagement continued to drive down attrition, especially with top performers,” said Dr. Vishal Sikka, CEO.

“Looking ahead, it is imperative that we increase our resilience to the dynamics of our environment and we remain resolute in executing our strategy, our path to transform Infosys, and to drive long term value for all stakeholders.”

“Attrition declined during the quarter reflecting our focus on better employee engagement. Utilization during Q4 reached 82% which is the highest in Q4 over the past several years”, said U. B. Pravin Rao, COO.

“In FY 17, operating margins were steady as we continued our sharp focus on operational efficiencies. Cash provided by operating activities during the year was robust and exceeded $2 billion, a new high”, said M. D. Ranganath, CFO. “Our capital allocation policy is aimed at balancing the strategic and operational needs of the company as well as enhancing shareholder returns”.


The company’s director board also appointed Independent Director Ravi Venkatesan as Co-Chairman.

Ravi Venkatesan, who has been on the Board of Infosys since April, 2011 has madevaluable contribution to the development of strategic direction of the Company during his tenure, the company said.

“Ravi will help me enhance the board engagement in supporting the Management in execution of company’s strategy”, said R. Seshasayee, Chairman of the Board. “This is an exciting time for the technology industry and I am delighted to have the opportunity to work more closely with Sesh and with Vishal and his leadership team in their transformational journey”, he said.


The revenue for Jan-March were $2.569 bln, up 0.7% compared to the previous quarter. Adjusted for currency movements, there was no growth during the quarter.

On a year on year basis, there was a growth of 5.3%, after adjusting for currency movements.

In rupee terms, revenues were Rs 17,120 crore, down 0.9% on quarter.

Operating profit for the quarter was $634 million, down 0.9% on quarter and up 1.5% on year.

Net profit was $543 million for the quarter ended March 31, 2017, down 0.8% on quarter and up 1.8% on year.

In rupee terms, net profit was Rs 3,603 crore, down 2.8% on quarter and up 0.2% on year.

The strengthening rupee may further dent the company’s margins going forward.

“The growth is below our expectations.. the outlook is disappointing, the capital allocation (plan) is the only positive,” said Urmil Shah of IDBI Capital.


For the full year, the company announced a final dividend of Rs 14.75 per share ($0.23 per ADS) amounting to Rs 4,078 crore ($ 628 million).

After including the interim dividend of Rs 11 per share, the aggregate dividend for the year amounts to Rs 25.75 per share.

As a result, the company paid out Rs 7,119 cr, which is about 50% of the net profit of the company and 63% of the cash it generated during the year.