Infosys promotes 2,000, gives 100% variable

Bengaluru: Infosys has handed out 2,000-odd promotions to its top-performing employees and increased variable payouts, following consecutive quarters of industry-leading growth.

India’s second-largest software exporter promoted 2,067 employees, after posting forecast-beating second-quarter numbers that overshadowed a lack-lustre performance from larger rival Tata Consultancy Services on Tuesday. Infosys increased variable payouts for the July-September quarter to 100% from 80% — it last handed out 100% variable payouts in the December quarter.

Infosys has so far given 4,711 promotions since the current financial year started in April, including more than 2,600 during the quarter ended in June, a company spokeswoman said.

The promotions and variable payouts come at a time when Infosys is attempting to counter attrition, which crept up in the September quarter.

While annualized standalone attrition stood at 14.1% for the quarter, consolidated attrition was 19.9%.

On a conference call with investors, on Monday, when Infosys reported its results, outgoing CFO Rajiv Bansal said the company’s margins benefited from a weaker rupee during the quarter, but those benefits were offset due to the variable payouts.

“Margins in the quarter were held by the rupee depreciating against the US dollar by 2.7%, which gave us a benefit of about 70 basis points, which was offset by an increase in variable pay for employees from 80% to 100% this quarter,” he said.

Infosys plans to hire about 20,000 from campuses during this financial year, COO UB Pravin Rao said during the same investor call.

“And in terms of compensation increase, we are already at the range which people are talking about. So when we look at competitions, they’re talking about Rs 3.3 lakh (average annual salary), we’re already at Rs 3.25 lakh for the last couple of years. So we are not seeing any material difference in doing that,” Rao said.

On Monday, despite posting forecast-eclipsing numbers, the company maintained its revenue guidance on constant currency (that, if the exchange rates remain the same), a move that is widely seen as overly conservative and disappointed investors who pulled down the company’s shares on Monday and Tuesday. Infosys shares closed more than 2% lower at Rs 1,098.65 on the BSE on Tuesday.

Experts though hailed Infosys’ stellar Q2 performance, saying the company was starting to show signs of a turnaround in its performance and is resembling its former bellwether self.

“Revenue above consensus on good volume, with pricing up 2.4% quarter-on-quarter. Adds $1 billion in new business to support visibility,” analyst James E Friedman of Susquehanna International Group wrote in a post-earnings research report.

“Though they didn’t raise 2016, we would expect upside risk, and are increasing 2017 estimates.”

 

SOURCE: PTI