29 April 2017 | Last updated 11:47 PM

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Infosys rewards shareholders
PTI | Friday, 14 April 2017 AT 10:34 AM IST
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13,000 crore payout to shareholders, but Q4 profits and revenue outlook fail to impress investors

Bengaluru: Infosys, India’s second-biggest software exporter, on Thursday announced plans to return Rs 13,000 crore from its cash pile to shareholders after it reported an almost flat net profit in the March quarter and sales outlook that fell short of estimates.

Yielding to pressure from a group of founders and former executives, the company announced a share buyback programme and a pledge to raise dividends.

It also appointed Ravi Venkatesan, an independent director, co-Chairman in a bid to address the founders’ corporate governance concerns. It will begin to pay 70 per cent of annual free cash flow as dividend compared to a previous policy of sharing up to half its post-tax profit.

For the January-March quarter, Infosys reported a 0.2 per cent rise in consolidated net profit at Rs 3,603 crore while revenue grew 3.4 per cent to Rs 17,120 crore.

In 2017-18 (April 2017 to March 2018), the company expects revenue to grow 6.5 per cent to 8.5 per cent in constant currency terms.

Infosys shares closed at Rs 931.40 apiece, down 3.86 per cent from previous close on the BSE.

“For 4QFY2017, the results were below expectations, on the sales front the company has posted revenue of $2,569 million v/s expectations of $2,589 million,” Sarabjit Kour Nangra  of Angel Broking said.

On a sequential basis, Infosys’ net profit fell 2.8 per cent while revenue declined 0.9 per cent.

“Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance,” Infosys CEO Vishal Sikka said.

He, however, declined to elaborate on the statement, merely saying, “...I need not tell you what the distractions have been. It is our job to manage the company to lead the company in the times that we are in”.

Sikka is grappling with twin problems of high-profile founders led by N R Narayana Murthy publicly criticising governance style, including salary hikes to top executives, and a visa crackdown by American President Donald Trump that will make it harder for companies like Infosys to send employees to work in the US.

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

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