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Infy expects 300 bps hit to margins on wage increase: CFO

Infosys Ltd, India's second-largest software services exporter, expects wage increases to hurt margins by 300 basis points in the next quarter, Rajiv Bansal, the company's chief financial officer, said on Friday.

Earlier, the company posted a 3.7 per cent year-on-year increase in its first-quarter net profit, matching estimates, after contract wins and foreign exchange gains boosted earnings.

Consolidated net profit for the quarter ended June 30 rose to Rs 2,374 crore (Rs 23.74 billion) from Rs 22.89 crore (Rs 22.89 billion) in the same year-ago period, Bangalore-based Infosys said on Friday.

Consolidated revenues were up 17.2 per cent to Rs 11,267 crore (Rs 112.67 billion).

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Infosys Q1 net profit up 3.7%, meets estimates

The company earnings per share rose 3.7 per cent to Rs 41.54.

The company’s liquid assets also saw an increase and stood at Rs 24,078 crore (Rs 240.78 billion) versus Rs 23,958 crore (Rs 239.58 billion) as on March 31, 2013.

The company said that it added 66 clients in the first quarter of the financial year and saw a net addition of 575 employees in the same period.

Infosys said that the revenues are expected to grow 13 per cent to 17 per cent for the financial year 2013/14.

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Infosys Q1 net profit up 3.7%, meets estimates

"This is far better than what some people in the market were expecting. The earnings have been pretty volatile in the last few quarters and this time around the expectations were muted given what has happened in the company recently,” said Tarun Sisodia, Director, Chanakya Niti Pvt Ltd, Mumbai

"I think the stock should now go for re-rating,” he said.

With inputs from Reuters