Infosys net zooms 38.3% on tax benefit

Infosys net zooms 38.3% on tax benefit

Global software major Infosys on Friday reported consolidated net profit of Rs 5,129 crore for the third quarter of fiscal 2017-18, registering 38.3 per cent record annual growth from Rs 3,708 crore in the like period a year ago. In a regulatory filing on the BSE, the city-based firm said revenue growth was expected to be 2.1-3.1 per cent annually at the December 31 exchange rate of Rs 63.88 per U.S. dollar. For Q3, the firm posted revenue of Rs 17,794 crore.

"During the quarter, on account of conclusion of an Advance Pricing Agreement with the US Internal Revenue Service, the company has reversed income tax expenses provision of United States dollars 225 million (Rs 1,432 crore) which pertains to previous periods which are no longer required", Infosys explained.

The company bought back shares worth Rs 13,000 crores.

Infosys maintained its revenue growth forecast for the year at 5.5% to 6.6% in constant currency. As a result, the current tax expenses reduced to Rs 144 crore from Rs 1,471 crore, sequentially.

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The company also had written down an unspecified amount invested in its innovation fund investment DWA Nova LLC, which impacted its net profit by $11 million (Rs 70 crore). "We had 8% year-on-year growth and 24.3% operating margin with US$ 593 million of free cash flow".

The company also earned $31 million (Rs 198 crore) from interest on income tax refund for the quarter. Considering a boost in the company's net profit, Infosys new CEO Salil Parekh said he would lay out strategic priorities for the company to build a "roadmap for future".

He said Infosys is a phenomenal company started by people who had tremendous vision, and that they created something which will last a very long time.

Highlighting the emergence of technology in terms of Artificial Intelligence (AI), Machine Learning, Internet of Things (IoT), Salil said Infosys is progressing towards stability and is "ready to serve clients in the new areas of demand".

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In Q3 results, the operating margin was improved to 24.3% from 24.2% in the September quarter.

"Our cash generation continued to be robust during the quarter". His predecessor Vishal Sikka quit late previous year after a long-drawn public fued with Infosys' founders.

Chief Operating Officer Pravin Rao said increased adoption of digital offerings and new services helped stabilise price realization, and they were "able to grow client relationships across revenue categories". "We successfully executed the share buyback of ₹13,000 crore in line with our capital allocation policy".

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