Print   Close

Infosys throws up big bonus surprise amid Panaya pain

Mail Today Bureau     July 14, 2018

Infosys Ltd, India's second biggest software services exporter, sprang a surprise on Friday by announcing a 1:1 bonus issue for shareholders even as the controversial Panaya deal eroded the company's bottomline. The company has recorded a reduction in the fair value amounting to Rs 270 crore ($39.4 million) in respect of the Panaya business, Infosys said in a statement.

Consequently the company posted a mere 3.7 per cent rise in quarterly profit, missing estimates. "The Board in its meeting...has considered, approved and recommended a bonus issue of one equity share for every equity share held and a stock dividend of one American Depositary Share (ADS) for every ADS held, as on a record date to be determined," the company said in the regulatory filing.

Profit for the quarter ended June came in at Rs 3,612 crore versus Rs 3,483 crore in the same quarter a year ago. Analysts, on average, had expected a net profit of Rs 3,740 crore, according to Thomson Reuters data.

Infosys also maintained its expectation for full-year revenue growth of between 6 to 8 per cent.

The company, which has its headquarters in Bengaluru, posted a 12 per cent rise in revenue from operations to Rs 19,128 crore compared to Rs 17,078 crore in the year-ago period.

Infosys has maintained revenue growth outlook at 6-8 per cent in constant currency for fiscal 2019. It had also maintained 2018-19 operating margin guidance in the range of 22-24 per cent.

"The strong revenue and margin performance in this quarter shows that our dual emphasis on agile digital and AI (artificial intelligence) driven core services is resonating with our clients", Salil Parekh, CEO and MD of the company said. The company sees "good traction in the market," he added.

The results were announced after market hours. Infosys shares closed 1.12 per cent higher at Rs 1,309.1 apiece on BSE.

In line with the announcement made on June 11, the company had voluntarily delisted its American Depository Shares from Euronext Paris and London on July 5. Its ADS were removed from Euroclear France on July 10. The main reason for delisting from Euronext Paris and London is low average daily trading volume of Infosys ADS on these exchanges, which was not commensurate with the related administrative expenses.

Infosys ADS will continue to be listed on the NYSE.

The Infosys financial result came just three days after India's largest software exporter TCS posted a 23.4 per cent rise in consolidated net profit to Rs 7,340 crore for the June quarter.

The Tata Group company saw its income from operations growing at 15.8 per cent to Rs 34,261 crore for the first three months of the current financial year, registering strong growth on all counts.


URL for this article :
https://www.businesstoday.in/sectors/it/infosys-throws-up-big-bonus-surprise-amid-panaya-pain/story/280278.html
 
@ Copyright 2018 India Today Group.