Quarterly Update
published on Apr 14, 2017
Report Overview:
NelsonHall’s Quarterly Update on Infosys provides a snapshot of developments at Infosys in the last quarter.
Who is this Report for:
NelsonHall’s Quarterly Update on Infosys provides a snapshot of developments at Infosys in the last quarter. It accompanies NelsonHall’s more comprehensive Key Vendor Assessment program. Both programs are designed for:
- Marketing, sales and business managers developing strategies to target service opportunities within the BPO/IT Services markets
- Sourcing managers monitoring the capabilities of existing suppliers of IT outsourcing services and identifying vendor suitability for IT services
- Consultants advising clients on vendor selection
- Vendor marketing, sales and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the BPO/IT services sector.
Scope of this Report:
The report provides a quarterly update on Infosys.
It accompanies NelsonHall’s Key Vendor Assessment program which looks at Infosys’ IT and BPO offerings, capabilities, and market and financial strengths, including:
- Identification of the company’s strategy, emphases, and new developments
- Revenue breakdowns
- Analysis of the company’s offerings and key service components
- Analysis of the profile of the company’s client base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s strengths, weaknesses, and outlook.
Key Findings & Highlights:
Q4 Performance “Unanticipated execution challenges and distractions”
- Fourth consecutive quarter of decelerating growth
- Operating margin was up 20 bps y/y.
FY17 Performance: maintained operating margin against backdrop of slowing topline growth
- Revenues up 8.3% in CC (just missing revised guidance). Rev per capita up slightly
- Operating margin towards the higher end of guidance
Management highlighted strong growth in “new software and software-related services”. Starting in Q1 FY18, management will report revenues on a quarterly basis from the new software also from new offerings. Color on current dynamics is that approximately 35% of the workforce is producing ~45% of the revenue
Guidance for full FY18 Muted
Revised Capital Allocation Policy
Large deal bookings up in Q4, but mostly renewals.
Significant increase in FY17 in a number of $100m+ accounts, a major step up on previous years.
Progress in Automation/AI
Board Change: new Co-Chairman
Should help some of the founders.
Leadership Changes in Two Software Units, to accelerate growth