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Infosys: Rooted In Culture
A global leader in tech services, infosys will be celebrating 20 years of global listing this year
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India’s second-largest software exporter by revenue, Infosys has done well continuously for several years on the trot. Except for certain blips in recent times. The company’s audit committee recently absolved CEO Salil Parekh and CFO Nilanjan Roy of all accusations of wrongdoing, thereby ending another episode in a long-drawn saga of whistleblower allegations that have dogged the company in recent years.
“Everything we are doing and driving is with integrity and we are looking ahead from that perspective,” Parekh told a newspaper recently. Earlier in January 2020, the company reported a 23 per cent year-on-year rise in net profit for the quarter ended 31 December 2019. It’s net profit rose to Rs 4,466 crore in the third quarter of the current fiscal compared to Rs 3,610 crore in the corresponding quarter of the last fiscal. “Q3 results further underscore that we remain steadfast in our journey of sustained client relevance and deepening engagement with them, as they partner with us in navigating their next step in the digital transformation era. For us, this has translated into double-digit growth year to date, leading to an increase in revenue guidance, accompanied by expanding operating margins,” said Parekh.
No account of Infosys’s successful journey would be complete without looking back at its beginnings. The company started life as Infosys Consultants in 1981 in Pune with seven engineers including NR Narayana Murthy, Nandan Nilekani, S Gopalakrishnan, SD Shibulal, K Dinesh, NS Raghavan, and Ashok Arora pooling an initial capital of $250. The company’s annual revenue touched $100 million in 1999, $1 billion in 2004, and $10 billion in 2017.
In FY19, the overall revenue of the company grew 9 per cent in constant currency terms to reach $11.8 billion. The company’s digital revenue grew more than 30 per cent during the period. For the year ended March 31, 2019 (FY19), Infosys reported revenues of Rs 82,675 crore, up 17.2 per cent from Rs 70,552 crore in FY18. Infosys’s net profit increased 10.5 per cent to Rs 4,078 crore for the fourth quarter ended 31 March, against Rs 3,690 crore in the same period a year ago. The operating margin stood at 21.5 per cent in the fourth quarter of FY2019, slipping marginally from 22.6 per cent in the October-December period.
For the full year ended 31 March 2019, the company’s net profit fell 3.9 per cent to Rs 15,410 crore. With a slight fall in profitability, the lower margin guidance for FY20 and a low revenue forecast was a dampener for the investors.
The BFSI sector continued to fetch the majority of Infosys’ revenue in the year ended March 2019, accounting for 31.6 per cent of its overall operating income in Q4. However, the BFSI business saw a marginal drop in growth in the fourth quarter and so did the retail and life sciences segments.
“We have completed the first year of our transformation journey with strong results on multiple dimensions including revenue growth, performance of our digital portfolio, large deal wins, and client metrics. This is a reflection of our increased client relevance stemming from our focus on digital, positioning, and longstanding client relationships”, said Parekh. “Our planned investments have started yielding benefits. As we look ahead in fiscal 2020, we plan to deploy various measures of operational efficiencies across the business,” he added.
Meanwhile, the company continues to give back to the Indian society in a number of ways. In January 2020, the Infosys Science Foundation honoured scientists with the Infosys Prize 2019 for their outstanding contributions to science and research at an awards ceremony in Bengaluru. The winners included two IIT professors as well.