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Infosys logs 13% rise in Q3 profit, beats market expectations

The country's second largest software services firm's consolidated revenue rose 5.9 per cent to Rs 13,796 crore in the quarter ended December 31, while it maintained its revenue outlook for the entire fiscal ending March 31.

Increasing its focus on software products and new age solutions like Artificial Intelligence, Internet of Things, Infosys also said it has expanded its innovation fund from the $100 million to $500 million, which will be used to invest in young firms world-wide.

Commenting on the firm's performance, Infosys CEO Vishal Sikka said: "We are excited by several breakthrough results in Q3. Our 'renew and new' strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption."

In dollar terms, Infosys posted 12.7 per cent jump in net profit to $522 million, while revenue was up 5.6 per cent to $2.21 billion in the third quarter.

Brokerage firm Angel Broking's Sarabjit Kour Nangra said that the third quarter profits are better than expected, while a sequential growth of 0.8 per cent in revenues at $2.2 billion is also in line with the expectations.

Infosys COO U B Pravin Rao said: "During the quarter, we saw broad-based volumes growth, increased utilisation and strong client additions. We have made 100 per cent variable payout for Q3 and have seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters."

During the third quarter, 2014-15, the firm added 4,227 people (net), taking its total headcount to 1,69,638. Infosys and its subsidiaries also added 59 clients (gross) during the quarter.

Infosys  also said that it will expand its ‘Innovation Fund’ five times to $500 million to provide financing to start-ups and new technologies like artificial intelligence.

“I am very excited that our board has approved expanding our start-up funding firm from 100 million dollars to $500 million and we will dedicate a part of that investing in India,” Infosys CEO and Managing Director Vishal Sikka said.

The Innovation Fund was formed in 2013 to fund start-ups and other innovative businesses outside the company.

Sikka said the company will chart out the details of using the funds in another three months time.
The fund will invest in start-up companies from across the world and will have a special focus on India, he added.

“Today, we are announcing a $500 million fund and it will take time, of course, to draw down from this fund, that will start investing in companies from around the world, but we also want to have a dedicated focus especially on Indian start-ups,” Sikka said. In August last year, Sikka had spoken about a new strategy, focused on renewing core business while building new capabilities like design thinking at the same time.
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