Infosys Q3 profit up 38%

Infosys on Friday posted over 38 per cent jump in third quarter net profit after it got a one-time tax benefit from US operations.

Salil Parekh, Infosys' new chief executive officer, who took over last week, maintained the sales growth forecast and said he will lay out strategic priorities for the company by April.

Its net profit for the October-December quarter, at Rs 5,129 crore or Rs 22.53 per share, was 38.3 per cent higher than Rs 3,708 crore in the year-ago period. While sales rose by a mere 3 per cent to Rs 17,794 crore, it got $225 million from tax-provision reversals by the US.

The conclusion of the Advance Pricing Agreement with US authorities led to the reversal of income tax expense provision of Rs 1,432 crore, which had a positive impact on the consolidated basic earnings per share in the quarter by about Rs 6.29.

The third quarter earnings announcement was first under Parekh who came in after a bitter boardroom tussle that led to Vishal Sikka's resignation. Parekh said the company is "progressing towards stability" and is well positioned to serve clients in the new areas of demand.

Pledging to keep steering Infosys away from a traditionally labour-intensive model, he said that his immediate priorities would include connecting with employees and clients to build a "roadmap for future" which will be announced in April.

Stressing that each of its clients is facing digital disruption, Parekh said that this has created an opportunity for the company. He said that building on strategy initiated by Infosys Chairman Nandan Nilekani, the company is conducting a review structured around four dimensions -- new market opportunities, client relationships, people and service offering portfolio.

"Over the next three months, I am meeting with several of our clients, employees, partners...Working with our leadership team and the Board to test the assumption and the approach and then build a comprehensive view along with four critical elements," Parekh said.

Revenue growth projections, which were cut last year after the boardroom upheaval, were kept unchanged at 5.5-6.5 per cent in constant currency for 2017-18 and 6.5-7.5 per cent in dollar terms. Sales in 2016-17 had risen by 9.7 per cent.

Nilekani said the company conducted an "exhaustive" shareholder consultation and received feedback on areas where it was doing well as also where it could do better. On the expansion of the Board, Nilekani said it will take "those decision at an appropriate time".

Asked how long will he remain at the helm of Infosys, Nilekani, who is the non executive chairman, said, "I will be there for as long as required, and not a day longer."

He said that the new CEO had brought stability to Infosys. "It has already settled down, it is absolutely stable and I think we have moved very quickly".