“We had unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals that we had won in earlier quarters, resulting in a lower than expected growth in Q1, said Vishal Sikka CEO, Infosys.
“Despite this, I am very encouraged by our progress in the execution of our strategy. We launched Infosys MANA, our AI based approach to helping clients continuously renovate their business processes and have already delivered on first client successes,” he added.
We have collated list of top six takeaways from Infosys Q1 results:
Cut in guidance: For FY17, Infosys has forecast revenue growth in the range of 11.8-13.8% — an ambitious prediction, but a guidance cut is something that will not go down well with respect to analyst estimates.
Infosys revised guidance on the lower side. The FY17 revenue dollar guidance was revised to 10.5%-12.0% in constant currency. The above constant currency guidance translates to 11.7%-13.2% in INR terms based on March 31st rates and 13.7%-15.2% based on June 30th rates. Dollar revenue: Dollar revenue for the quarter increased 2.2 per cent QoQ to $2501 million for the quarter ended June 30 from $ 2446 million reported in the previous quarter. It was slightly lower than ETNow estimate of $ 2,554 million.
Geographical segment: North America grew by 2.5 per cent sequentially and about 2.4 per cent in constant currency terms. Europe grew by 0.6 per cent sequentially and declined by 0.3 per cent in constant currency.India declined by 7.6 per cent sequentially and 8.2 per cent in constant currency while rest of the world grew by 6.9 per cent sequentially and about 4.9 per cent in constant currency.
Industry segment: FSI grew by 2.2 per cent sequentially and by 1.7 per cent in constant currency. MFG & Hi-Tech grew by 2.9 per cent sequentially and 2.4 per cent in constant currency.
RCL grew by 1 per cent sequentially and 0.7 per cent in constant currency while ECS grew by 3.1 per cent sequentially and 2.4 per cent in constant currency. Client Additions & Investments: Infosys added 3 clients to over $100 million category taking total count to 17. Infosys made an investment in Trifacta in the June quarter, a leading provider of data wrangling software that enables non-technical users to easily transform data for analysis.
As part of this investment Trifacta will provide a data wrangling solution for the Infosys Information Platform (IIP) and Infosys’ other platforms and offerings.
Attrition: Attrition rate increased to 21 per cent sequentially in the June quarter from 17.3 per cent recorded in the previous quarter.