The Infosys co-founder, who was brought back to head the firm in June last year, also expressed unhappiness over the laggard performance in the last two years. ‘Under normal circumstances, our operating margin should have been 41.5 per cent. But it ended up as 23.5 per cent as of date and that means it is a drop of approximately 45 per cent.
‘Therefore, revenue growth went down by 77 per cent and margin growth went down by 45 per cent during the period 31 March 2011 to 31 March 2013. These are matters of great concern for us,’ he told investors at a Barclays meet.
The rupee was about 44 per dollar as of 31 March, 2011, moving to around 54-55 as of 31 March, 2013 and went further down to 62 in September last year.
‘About 48 per cent of our revenue gets translated to rupee and given that there was a devaluation of about 25 per cent in the rupee-dollar exchange rate, we should have added approximately 12 per cent to our operating margin,’ he said.
He also pointed that the decline in operating margin from 29.5 per cent in FY'11 to 23.5 per cent for the current year is also a cause of concern. Referring to the movement in Rupee-Dollar exchange rate from 44 to 62 in the last two years, Murthy said the company should have added approximately 12 per cent to its operating margin.
‘We are not very happy with our performance over the last two years in the financial year 2012 and 2013. Our growth rate was about 5.8 per cent compared to the 11 per cent for the Indian software industry,’ Murthy said.
For the ongoing fiscal, which closes on 31 March this year, Infosys expects revenue growth to be somewhere between 11.5 per cent and 12 per cent.
Stressing that there is ‘absolutely nothing wrong’ with its Infosys 3.0 strategy, Murthy accepted that the company could have ‘done a better job in executing that strategy’. As part of the Infosys 3.0 strategy, the country's second largest software firm intended to focus on transformational projects, new solutions like cloud computing and mobility as well as enhance focus on products, platforms and solutions.
He added that Infosys has set about an action plan to move towards better growth rate and better margins. Infosys CEO and MD SD Shibulal said he expects sluggish growth in January-March quarter due to muted client spending, especially in retail and may spill over to 2014-15 fiscal.
...Scrip crashes 8.54%, drives Sensex down to one-week low
Mumbai: Steep fall in software bellwether, Infosys, led the benchmark S&P BSE sensex to drop by 82 points to end at nearly one-week low of 21,774.61 despite firm European cues and sustained buying by foreign funds.
The country's second largest software services giant, Infosys, on Thursday crashed by 8.54 per cent and mainly weighed down on the market after the IT major indicated weakness in client spending through the current quarter ending 31 March, 2014.
Besides, Infosys, Sun Pharma, TCS, Axis Bank, SSLT and Maruti Suzuki also suffered losses while gains in HDFC Bank, ITC, RIL, ONGC, M&M, ICICI Bank and HDFC cushioned the sensex fall to a major extent.
The BSE 30-share barometer resumed lower but immediately recovered and moved in positive terrain but in a narrow range till late afternoon trade on mixed Asian trends and better European opening.
Fag-end selling later pulled the sensex down to settle at 21,774.61, a net fall of 81.61 points or 0.37 pct.
The wide-based 50-issue CNX Nifty of the NSE also dropped by 23.80 points or 0.37 per cent to end below 6,500-mark at 6,493.10.
IT, tech, realty, power and pharma stocks suffered losses while stocks from refinery, banking, auto and FMCG segments attracted good buying interest. Meanwhile, Foreign Institutional Investors (FIIs) bought shares worth Rs 864.35 crore on Wednesday, as per provisional data from the stock exchanges. Asian stocks closed mixed. Key benchmark indices from Hong Kong, Japan and Singapore closed with losses while from China, South Korea and Taiwan finished with gains.
‘Therefore, revenue growth went down by 77 per cent and margin growth went down by 45 per cent during the period 31 March 2011 to 31 March 2013. These are matters of great concern for us,’ he told investors at a Barclays meet.
The rupee was about 44 per dollar as of 31 March, 2011, moving to around 54-55 as of 31 March, 2013 and went further down to 62 in September last year.
‘About 48 per cent of our revenue gets translated to rupee and given that there was a devaluation of about 25 per cent in the rupee-dollar exchange rate, we should have added approximately 12 per cent to our operating margin,’ he said.
He also pointed that the decline in operating margin from 29.5 per cent in FY'11 to 23.5 per cent for the current year is also a cause of concern. Referring to the movement in Rupee-Dollar exchange rate from 44 to 62 in the last two years, Murthy said the company should have added approximately 12 per cent to its operating margin.
‘We are not very happy with our performance over the last two years in the financial year 2012 and 2013. Our growth rate was about 5.8 per cent compared to the 11 per cent for the Indian software industry,’ Murthy said.
For the ongoing fiscal, which closes on 31 March this year, Infosys expects revenue growth to be somewhere between 11.5 per cent and 12 per cent.
Stressing that there is ‘absolutely nothing wrong’ with its Infosys 3.0 strategy, Murthy accepted that the company could have ‘done a better job in executing that strategy’. As part of the Infosys 3.0 strategy, the country's second largest software firm intended to focus on transformational projects, new solutions like cloud computing and mobility as well as enhance focus on products, platforms and solutions.
He added that Infosys has set about an action plan to move towards better growth rate and better margins. Infosys CEO and MD SD Shibulal said he expects sluggish growth in January-March quarter due to muted client spending, especially in retail and may spill over to 2014-15 fiscal.
...Scrip crashes 8.54%, drives Sensex down to one-week low
Mumbai: Steep fall in software bellwether, Infosys, led the benchmark S&P BSE sensex to drop by 82 points to end at nearly one-week low of 21,774.61 despite firm European cues and sustained buying by foreign funds.
The country's second largest software services giant, Infosys, on Thursday crashed by 8.54 per cent and mainly weighed down on the market after the IT major indicated weakness in client spending through the current quarter ending 31 March, 2014.
Besides, Infosys, Sun Pharma, TCS, Axis Bank, SSLT and Maruti Suzuki also suffered losses while gains in HDFC Bank, ITC, RIL, ONGC, M&M, ICICI Bank and HDFC cushioned the sensex fall to a major extent.
The BSE 30-share barometer resumed lower but immediately recovered and moved in positive terrain but in a narrow range till late afternoon trade on mixed Asian trends and better European opening.
Fag-end selling later pulled the sensex down to settle at 21,774.61, a net fall of 81.61 points or 0.37 pct.
The wide-based 50-issue CNX Nifty of the NSE also dropped by 23.80 points or 0.37 per cent to end below 6,500-mark at 6,493.10.
IT, tech, realty, power and pharma stocks suffered losses while stocks from refinery, banking, auto and FMCG segments attracted good buying interest. Meanwhile, Foreign Institutional Investors (FIIs) bought shares worth Rs 864.35 crore on Wednesday, as per provisional data from the stock exchanges. Asian stocks closed mixed. Key benchmark indices from Hong Kong, Japan and Singapore closed with losses while from China, South Korea and Taiwan finished with gains.