Infosys posts highest volume growth in 19 quarters; adds 79 clients in first quarter

Infosys today announced the financial results for the quarter ended June 30, 2015.  Revenues were Rs 14,354 crore for the quarter ended June 30, 2015. The QoQ growth was 7.0%, while the YoY growth was 12.4%. Net profit was Rs 3,030 crore for the quarter ended June 30, 2015, while QoQ decline was 2.1%, and YoY growth was 5.0%

Infosys witnessed volume growth of 5.4%, with 6 large deals signed with TCV of $ 688 mn. It also added 79 clients, with utilization (excluding trainees) expanding 160 bps to 80.2%. The quarterly annualized attrition for Infosys was at 14.2% compared to 23.4% in Q1 15.

“I am very pleased with our performance in the first quarter. Our efforts in redesigning our clients’ experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients”, said Dr. Vishal Sikka, CEO and MD. “While we are still early in our journey to become the leading next-generation services company, this gives us good momentum for the rest of the year.”

“The organization realignment made earlier this year for deeper client and operational focus has resulted in strong volume growth”, said U B Pravin Rao, COO. “We continued the roll out of employee engagement initiatives around collaboration and simplification of internal processes in order to retain the industry’s best talent.”

“We are operating within our stated margin band, balancing strategic investments and client focus with operational efficiencies”, said Rajiv Bansal, CFO. “Pricing environment is competitive which we are addressing through automation and improvement in productivity.”

Business Highlights
Infosys made significant client additions this quarter, including six large deals, each greater than USD$50 million in total contract value.

Client wins
* This quarter,  Infosys signed a multi-year agreement with Deutsche Bank encompassing bespoke development, application maintenance services, digital and mobility services, package implementation, and testing services.  The firm is now a strategic partner under Deutsche Bank’s Supplier Partnership Program.

* Infosys was selected as a strategic partner by Allied Irish Banks, p.l.c. (AIB), a financial services group operating predominantly in the Republic of Ireland and the U.K. As part of this engagement, Infosys will provide application development and management services, along with transformation and innovation services. Infosys will also set up a 200-seat facility in Dublin to house the staff who will be transferred from AIB.

*  Infosys won a multi-year contract with ServiceFirst, an internal shared service of the Australian State of New South Wales organization. The total commercial value of the deal is US $76 million and will include BPO and SAP services.

Platforms
Till date, Infosys said that it has more than 127 client engagements where the Infosys Information Platform has been used and it has completed 16 pilot programs using this platform. The company said that it was encouraged by the traction it was seeing with Panaya post the acquisition, and have won 15 new deals across different industries through  joint offerings. A European logistics company selected the Infosys Information platform to deliver near real-time data-based tracking and reporting of operational metrics and project business volumes for capacity planning.

Infosys won a project from a global pharmaceutical company to develop a predictive equipment maintenance process based on equipment operating conditions and maintenance history information using the capabilities of the Infosys Information Platform.

Another pharmaceutical company engaged Infosys to develop a big data and analytics technology platform architecture. The client also implemented the Infosys Information Platform to deliver on a range of operational reporting in areas such as supply chain and inventory management using data from source systems such as SAP.

Products
This quarter, the shareholders authorized the transfer of business of Finacle and Edge Services to EdgeVerve with effect from August 1, 2015 or such other date as may be decided by the Board, for a consideration of upto Rs 3,400 crore and upto Rs 220 crore respectively. EdgeVerve Systems is a wholly-owned subsidiary of Infosys. EdgeVerve saw a great beginning to the year with 14 wins and 4 client go-lives. A large consumer health and medical devices company selected ProcureEdge to power its source-tosettle transformation. ProcureEdge will be implemented worldwide by the client to bring transformation and savings across its buying organization. A large European telecom company expanded its use of AssistEdge to include over 5,000 operators in its call centres, enabling them to simplify and automate business processes by integrating multiple disparate systems; thereby reducing call handling time.

Finacle
This quarter, Finacle sustained strong business momentum with 19 wins and 12 go-lives across the globe. Wins in the quarter included Corporation Bank and Indian Overseas Bank, both of which opted for its core banking solution. Building on last quarter’s success with Qantas Credit Union, Finacle also added another client in Australia for digital transformation. Finacle continued to expand its solutions suite with three new offerings - Finacle Assure, Finacle Youth Banking solution and Finacle SME Enable. Finacle also extended its partnership with Microsoft Corp making its suite of solutions available on Microsoft Azure cloud.

Acquisitions, Investments and Partnerships
This quarter, Infosys completed the acquisition of Kallidus Inc. (d.b.a Skava) and its affiliate, a leading provider of digital experience solutions, including mobile commerce and in-store shopping experiences to large retail clients. The acquisition of Skava is part of Infosys’ strategy to help clients bring new digital experiences to their customers through IP-led technology offerings, new automation tools and unparalleled skill and expertise in these new emerging areas.

Infosys has joined the Industrial Internet Consortium (IIC), an open membership group established to improve the integration between the physical and the digital worlds and accelerate the adoption of Internet of Things. We will focus on the development of future IIC testbeds with key ecosystem partners, leveraging our expertise in predictive analytics as applied to maintenance, operations, information, service and energy. Our work on predictive analytics solutions for asset efficiency will be anchored on open-source and open-access ingredients for rapid innovation by the community.

Infosys also continued to enhance its capabilities in Design Thinking across the organization, and has trained more than 39,000 employees till date.

Arif Rehman, Director, Supply Chain Operations, Cisco said, “Infosys has been a strategic partner on our journey to catalyze innovation across the Global Manufacturing Operations organization. They have been working closely with us from an organizational perspective to incorporate Design Thinking and an innovator's mindset into how our teams collaborate, ideate and prototype towards more user centric solutions. What I appreciate the most is their ability to take a concept like innovation and contextualize it into the day to day workings of our very analytical, knowledge-centric workforce.”

This quarter, Infosys also set aside US$10 million from its global Innovation Fund for Ireland-based start-ups. Earlier this year, Infosys announced the US$500 million Innovation Fund earmarked for investments in the growth of disruptive new technologies.