India’s second largest IT services company, Infosys, registered a flat growth in net profit for the fourth quarter ended March 31, 2017. The company attributed the weak performance to execution challenges, seasonally weak quarter and currency fluctuations.
Infosys registered a growth of 0.2% in net profit and stood at Rs. 3,603 crore when compared to the same period last year. The IT major’s total revenue for the period registered a growth of 3.4% and stood at Rs. 17,120 crore for the January-March period when compared to the same period last year.
On quarterly basis the revenue declined by 0.9% while the profit declined by 2.8%, the company said in a regulatory filing.
For the fiscal ended March 31, 2017 the total revenue stood at Rs 68,484 crore registering a growth of 9.7%. The net profit for the year stood Rs 14,353 crore reporting a growth of 6.4%.
“Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance,” said Vishal Sikka, Chief Executive Officer, Infosys.
However, the IT major offered a weak outlook for the fiscal ending March 31, 2018, wherein it expects the full year revenue to grow 6.5% – 8.5% in constant currency, which is lower than the industry expectations.
For FY2017, the company’s board announced a final dividend of Rs.14.75 per share amounting to Rs. 4,078 crore. After including the interim dividend of Rs. 11 per share, the aggregate dividend for Financial Year 2017 amounts to Rs. 25.75 per share resulting in total payout of Rs. 7,119 crore.
As on March 2017, the company’s total headcount stood at 2,00,364 people and it made a gross addition of 601 during the quarter.
“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, Chief Operating Officer, Infosys.
Revises capital allocation policy
The company in its statement also said, its Board reviewed and approved a revised Capital Allocation Policy of after taking into consideration the strategic and operational cash requirements of the company in the medium term.
As per the new capital allocation policy effective from FY 2018, Infosys expects to payout up to 70% of the free cash flow of the corresponding financial year by way of dividend and/or share buyback as may be decided by the board. The company’s current policy is to pay dividends of up to 50% of post-tax profits of the financial Year.
The liquid assets including cash and cash equivalents and investments of the company stood at Rs. 38,773 crore as on March 31, 2017.
The board has also identified an amount of upto Rs. 13,000 crore to be paid out to shareholders during Financial Year 2018, including by way of dividend and/or share buyback to be decided by the board.
“Our capital allocation policy is aimed at balancing the strategic and operational needs of the company as well as enhancing shareholder returns,” said M.D. Ranganath, Chief Financial Officer, Infosys.
The Board of Infosys also appointed Ravi Venkatesan, Independent Director as Co-Chairman of the Board. Mr. Venkatesan, has been on the Board of Infosys since April 2011.