Bengaluru, January 12, 2019: “With increased client relevance, we saw double-digit (10.1%) year-on-year growth in Q3 on a constant currency basis”, said Salil Parekh, CEO, and MD. “We also had another strong quarter in our digital business with 33.1% growth and large deals at $1.57 billion which gives us confidence entering 2019”, he added.
*Includes additional depreciation and amortization impact of 0.4% due to the reclassification of assets of Panaya and Skava from “Held for Sale”.
Revenues were `61,137 crores, growth of 16.6% YoY
Operating profit was `14,261 crore, growth of 12.5% YoY
Basic EPS was `26.06, a decline of 3.6% YoY##@
Revenues were `21,400 crores, growth of 20.3% YoY and 3.8% QoQ
Operating profit was `4,830 crore, growth of 11.8% YoY and decline of 1.3% QoQ#
Basic EPS was `8.30, a decline of 26.4% YoY#@ and 12.2% QoQ#
Financial Highlights- Consolidated results under International Financial Reporting Standards (IFRS)
#Includes additional depreciation and amortization expenses of `88 crore for Panaya and Skava. Additionally, Basic EPS includes the reduction in fair value of Skava which together resulted in a reduction in EPS by `1.24.
##Includes additional depreciation and amortization expenses, reduction in fair value and carrying value of Panaya and Skava, respectively which resulted in a reduction in EPS by `1.86.
@Includes impact on account of the conclusion of an APA with the US IRS which has led to an increase in EPS of `3.15 for the quarter ended December 31, 2017, and `2.91 for nine months ended December 31, 2017.
“Volume growth was strong and revenue productivity was stable despite Q3 being a seasonally weak quarter. We had good growth across geographies and large business segments”, said Pravin Rao, COO. “Attrition declined during the quarter and we are continuing on the path of increased interventions and employee engagements to reduce it further.”
“We saw significant currency volatility during the quarter and managed it effectively by our hedging strategy”, said Jayesh Sanghrajka, Interim CFO. “Cash generation was strong during the quarter. Executing on the capital allocation strategy announced in April 2018, we have announced a share buyback program and a special dividend.”
Capital Allocation Policy
The Board in its meeting held today approved the following:
After the execution of the above, along with the special dividend (including dividend distribution tax) of ₹2,633 crore ($386 million) already paid in June 2018, the Company would complete the distribution of ₹13,000 crore, which was announced as part of its capital allocation policy in April 2018.
As the USD/INR* exchange rates have moved from April 2018 when the capital allocation policy was announced, the total capital allocation in US$ terms amounts to $1,872 million (comprising $1,184 million pertaining to buyback as mentioned above, $386 million towards special dividend paid in June 2018 and $302 million towards special dividend to be paid to shareholders in January 2019).
*US$ 1= ₹69.78 as at December 31, 2018
Assets Held for Sale: The company had earlier classified its subsidiaries Kallidus & Skava (together referred to as “Skava”) and Panaya as “Held for Sale”. During the quarter ended December 31, 2018, based on the evaluation of proposals received and progress of negotiations with potential buyers, the Company concluded that it is no longer highly probable that sale would be consummated by March 31, 2019. Accordingly, Panaya and Skava have been de-classified from “held for sale” in accordance with the requirements of IFRS 5.
On de-classification, the Company recognized additional depreciation and amortization expenses of `88 crore and a reduction of `451 crores in the carrying value for Skava. The impact of the same on the Basic Earnings Per Share was a decrease of `1.24 for the quarter ended December 31, 2018. The Company plans to repurpose Skava’s micro services-based business and refocus Panaya’s suite of products.
Board Update: Based on the recommendation of the Nomination and Remuneration Committee, the Board approved the re-appointment of Kiran Mazumdar-Shaw as the Lead Independent Director from April 1, 2019, to March 22, 2023, subject to shareholder’ approval
“I am delighted that the Infosys Board of Directors has unanimously recommended Kiran Mazumdar-Shaw for reappointment as the Lead Independent Director.”, said Nandan Nilekani, Chairman of the Board. “Kiran has been a pillar of strength to the board, especially over the last eighteen months as we steered the company to stability and growth. As chair of the Nominations & Remuneration Committee, she played a critical role in the CEO and CFO selection process. Her continuity, experience, and insights are greatly valued by the Board as it guides the company in executing its strategy in the coming years”, he added.
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