HomeHow Infosys is fighting COVID-19 crisis: With focus on digital and Rs 27,500 crore in the bank

How Infosys is fighting COVID-19 crisis: With focus on digital and Rs 27,500 crore in the bank

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By Mugdha Variyar  April 21, 2020, 6:37:56 AM IST (Updated)

How Infosys is fighting COVID-19 crisis: With focus on digital and Rs 27,500 crore in the bank
Infosys is confident it will tide over the coronavirus pandemic, thanks to its fortress-like balance sheet and an unrelenting focus on digital, the company said today after declaring its fourth-quarter earnings.


“We have a strong cash position of $3.6 billion (about Rs 27,500 crore) and there is no debt on the balance sheet,” CEO Salil Parekh pointed out during the Q4 earnings conference call.

The company today reported a profit rise of 6.3 percent to Rs 4,321 crore, beating street estimates, even as its revenues were up 0.8 percent to Rs 23,267 crore.

It also announced a dividend of Rs 9.50 per share, bringing the total dividend to Rs 17.50 per share for the whole year.

The company was even able to sign large deals in the last few weeks of March and some in early April, Parekh said.

Infosys saw large deal wins to the tune of $1.65 billion in Q4, and $9 billion dollars of big deal wins through the year.

The CEO said Infosys is seeing increased interest by clients in solutions such as cloud, virtualisation and workforce transformation etc.

Digital revenue growth for the company was strong in Q4 at 31.7 percent. Digital now stands at 42 percent of overall revenues.

Still, the coronavirus crisis is expected to put pressure on revenues for IT companies as customers cut budgets and discretionary spends for at least two quarters, analysts said.

Infosys, too, said it would suspend its practice of providing "guidance", financial-speak for future earnings projection, citing uncertainty in the business environment, adding that the practice will improve once conditions get better.

Infosys is also looking at reducing discretionary spends and said there will be a freeze on hirings, promotions and salary hikes. It will also look at rationalisation of capital expenditure costs.

"Travel is a big cost, so that cost has come down during the lockdown," CFO Niranjan Roy said. "We will look at capex spends. We spent $450 million on capex last year."

As The IT major said it has enabled 93% of employees to work from home without affecting productivity.

“The feedback from clients on our speed and agility in transitioning is encouraging,” said COO UB Pravin Rao. "We had to upgrade networks to handle people working form home, provide dongles, UPS etc."

Rao said the company is also focusing on cybersecurity as most of its employees are working from less-than-secure home environments, an arrangement whose risks were underlined in a recent ransomware attack on Cognizant.

"We are aware of ransomware attacks. We have looked at our networks and they are secure. We have invested in advance protection software and are engaging with threat detection agents," Rao said.
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