Infosys Q4 profit slips to Rs 3,690cr; puts up Skava, Panaya on sale

BANGALORE, INDIA: Infosys' Q4 net profit fell 28.1 percent sequentially to Rs 3,690 crore, from Rs 5,130 crore in Q3. Revenue grew 1.6 percent QoQ to 18,083 crore, mostly in line with the street expectations.

The company reported revenues from Digital offerings at $ 2.79 billion (25.5% of total revenues) for FY 18. In Q4, digital revenues grew sequentially by 3.6% in constant currency terms.

“We will execute our strategy around the four pillars of Scaling our Agile Digital business which is today US$2.79 billion in revenue, Energizing our client’s Core technology landscape via AI and automation, Re-skilling our employees, and Expanding our localization in markets such as US, Europe, and Australia,” said Salil Parekh, CEO.

“Revenue productivity per employee was stable during the year as the benefits of automation and newer services kicked in. Employee utilization remained healthy,” said Pravin Rao, COO. “During the quarter, we provided highest level of variable payouts in several years. We will be rolling out compensation increases for a large part of our workforce effective April 1st.”

The company has put up its subsidiaries Skava and Panaya for sale after the strategic review of its portfolio of businesses. "In the quarter ended March 2018, the company initiated identification and evaluation of potential buyers for its subsidiaries, Kallidus and Skava (together referred to as Skava) and Panaya. The company anticipates completion of the sale by March 2019 and accordingly, assets amounting to Rs 2,060 crore (USD 316 million) and liabilities amounting to Rs 324 crore (USD 50 million) in respect of the disposal group have been reclassified and presented as held for sale," said the company.

On reclassification, the company has recognized an impairment loss of Rs 118 crore (USD 18 million) in respect of Panaya in the consolidated profit and loss for the quarter and year ended March 2018. The corresponding write down in the investment value of Panaya in the standalone financial statements is Rs 589 crore (USD 90 million), said Infosys.

The company also entered into a definitive agreement to acquireUS-based digital creative and consumer insights agency, WongDoody Holding Company.

Infosys kept its full year constant currency revenue guidance at 6-8 percent and INR revenue at 8.2%-10.2%.