Canada markets closed
  • S&P/TSX

    19,999.59
    -144.45 (-0.72%)
     
  • S&P 500

    4,166.45
    -55.41 (-1.31%)
     
  • DOW

    33,290.08
    -533.37 (-1.58%)
     
  • CAD/USD

    0.8021
    -0.0073 (-0.90%)
     
  • CRUDE OIL

    71.50
    +0.46 (+0.65%)
     
  • BTC-CAD

    44,176.87
    -416.71 (-0.93%)
     
  • CMC Crypto 200

    888.52
    -51.42 (-5.47%)
     
  • GOLD FUTURES

    1,763.90
    -10.90 (-0.61%)
     
  • RUSSELL 2000

    2,237.75
    -49.71 (-2.17%)
     
  • 10-Yr Bond

    1.4500
    -0.0610 (-4.04%)
     
  • NASDAQ

    14,030.38
    -130.97 (-0.92%)
     
  • VOLATILITY

    20.70
    +2.95 (+16.62%)
     
  • FTSE

    7,017.47
    -135.96 (-1.90%)
     
  • NIKKEI 225

    28,964.08
    -54.25 (-0.19%)
     
  • CAD/EUR

    0.6758
    -0.0036 (-0.53%)
     

UPDATE 3-India's Infosys falls over 5% on profit miss, attrition worries

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

(Changes dateline, adds analyst comment and share movement)

By Sankalp Phartiyal and Sethuraman N R

NEW DELHI/BENGALURU, April 15 (Reuters) - Infosys Ltd shares fell as much as 5.5% on Thursday, a day after the Indian software services firm reported quarterly net profit below analysts' estimates and on worries that a spike in voluntary attrition could squeeze margins.

The Bengaluru-headquartered company posted a 17.5% rise in net profit to 50.76 billion rupees ($675.4 million) in the three months to March 31. Analysts had estimated a profit of 51.93 billion rupees, according Refinitiv data.

The sharp increase in attrition is a cause of worry and could be a risk to the top end of margin guidance, Investec analysts said in a note.

On Wednesday, Infosys Chief Executive Officer Salil Parekh said in a call with reporters that the company was targeting margins of 22% to 24% for the full year 2021-22.

Infosys reported a voluntary attrition rate of 15.2% for its IT services segment during the March quarter, up from 10% in the preceding quarter.

"Considering the strong deal momentum, a continued increase (in attrition) would require higher lateral additions and potentially meatier salary increases to retain talent," Investec said.

In addition to employee costs, Infosys will also have transition costs from large deals and return of some expenses which were saved because of the COVID-19 pandemic, Investec analysts said.

On Wednesday, Infosys forecast annual revenue growth of 12% to 14% in constant currency terms for the year to end-March 2022, buoyed by client demand for its digital services during the pandemic.

Quarterly revenue rose to 263.11 billion rupees from 232.67 billion rupees a year earlier.

The company recommended a final dividend for the year of 15 rupees per share, and approved a share buyback of up to 92 billion rupees.

Bigger rival Tata Consultancy Services on Monday posted a 15% jump in profit on cloud services demand, while smaller counterpart Wipro will report results later on Thursday.

($1 = 75.2930 Indian rupees) (Reporting by Sankalp Phartiyal in New Delhi; Additional reporting by Shivani Singh and Chris Thomas in Bengaluru; Editing by David Goodman, Jan Harvey and Subhranshu Sahu)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting