Infosys, India's second largest software services exporter, today reported a weaker-than- expected 3.5 per cent growth in March quarter profit and said it expects revenue to rise by up to 12 per cent this fiscal.
The IT major posted a net profit of Rs 3,097 crore in January-March compared to Rs 2,992 crore a year earlier but was short of analyst expectation due to currency fluctuations and falling demand for traditional outsourcing services.
Revenue during the quarter review rose by 4.2 per cent to Rs 13,411 crore from Rs 12,875 crore in the comparable period in the previous fiscal.
Infosys CEO Vishal Sikka said he hopes the company, once a bellwether of India's USD 150 billion IT services industry, will lead the industry by 2016-17.
The company is targeting revenues to more than double to USD 20 billion by 2020 from USD 8.7 billion in 2014-15.
Infosys also said that it agreed to buy Kallidus Inc, a US-based digital software company that offers a cloud-backed platform for mobile websites and apps for USD 120 million.
The company, Sikka said, will continue to look at buyout and is bringing in next generation technology architectures likes artificial intelligence and cloud-based services.
This fiscal, Infosys said, it expects revenue growth of 10-12 per cent, below Nasscom's estimate of 12-14 per cent. Revenue, two-thirds of which comes from the US and Europe, grew 6.4 per cent in the last fiscal to Rs 53,319 crore.
"Pricing continues to be under pressure" due to stiff competition in traditional outsourcing business, Chief Operating officer U B Pravin Rao said.
The company increased the annual dividend payout to 50 per cent of profit from 40 per cent, and further said that it would give shareholders one bonus share for each share held.
Speaking to reporters here on the road ahead, Sikka said: "We are expecting to grow at 10-12 per cent. We are targeting revenues of USD 20 billion by 2020. Our average revenue per employee is expected at USD 80,000 by 2020."
Infosys shares fell sharply closing 6 per cent at Rs 1,996.25 on BSE.
"The traditional model of IT outsourcing is dying," Sikka said.
Infosys's rival TCS, Wipro and HCL Tech all had reported earning numbers that fell below expectations, hit by currency fluctuations as the US dollar grew stronger against all major currencies and Indian rupee.
"We see industry going through a fundamental and structural transition. Despite being a challenging quarter, I am encouraged by the early successes in executing our Renew-New strategy, on a foundation of learning," Sikka said.
