Infosys (NYSE: INFY) Announces Results for the Quarter Ended June 30, 2018

BENGALURU,India,July 13,2018 /-FirstCall/ --

Digital revenues at $803 million (28.4% of total revenues),sequential growth of 8.0% and year-on-year growth of 25.6% in constant currency terms

1:1 bonus issue of equity shares and 1:1 stock dividend of American Depositary Shares

Q1 19 revenues grew year-on-year by 6.8% in USD terms; 6.0% in constant currency terms

Q1 19 revenues grew sequentially by 0.9% in USD terms; 2.3% in constant currency terms

Operating margins at 23.7%,at the upper quartile of the guidance

Large deal wins crossed $1 billion,of which over 40% was from Financial Services

$ 100 mn clients increased sequentially by 4 to 24

Utilization (excluding trainees) at all-time high of 85.7%

Free Cash Flow up sequentially by 32.1% in USD terms

RoE increases to 25.5% as compared to 24.1% last quarter

EPS grew by 3.9% on a year-on-year basis

FY 19 revenue guidance in constant currency retained at 6%-8%; FY 19 operating margin guidance retained at 22%-24%

1. Financial Highlights

Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended June 30,2018

Revenues were $2,831 million for the quarter ended June 30,2018

YoY growth of 6.8%; QoQ growth of 0.9%

Net profit was $534 million for the quarter ended June 30,2018,including impact of $39 million on account of reduction in the fair value of Assets held for sale

YoY decline of 1.2%; QoQ decline of 6.5%

Basic EPS was $0.25 for the quarter ended June 30,including impact of $0.02 on account of reduction in the fair value of Assets held for sale

YoY growth of 3.9%; QoQ decline of 6.5%

"The strong revenue and margin performance in this quarter shows that our dual emphasis on Agile Digital and AI-driven Core services is resonating with our clients," said Salil Parekh,CEO and MD. "With our Agile Digital business growing sequentially at 8% in constant currency and increase in our large deal wins to over US$ 1 billion,we see good traction in the market."

"Our emphasis on deepening client relationships resulted in strong client metrics including increase in the number of $100 million+ clients to 24," said U B Pravin Rao,COO. "Utilization excluding trainees reached an all-time high of 85.7%."

"We had broad-based financial performance on multiple fronts - RoE crossed 25%,Free cash flow was up 32% quarter on quarter and operating margins were at the upper quartile of our margin guidance," said M.D. Ranganath,CFO. "While we continue to make strategic investments to leverage the opportunities in Digital,our relentless focus on operational efficiencies continued in this quarter."

2. Bonus issue of equity shares

The Board in its meeting held on July 13,2018 has considered,approved and recommended a bonus issue of one equity share for every equity share held and a stock dividend of one American Depositary Share (ADS) for every ADS held,as on a record date to be determined. Consequently,the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder would remain unchanged. The Board approved and recommended the issue of bonus shares to celebrate the 25th year of Company's public listing in India and to further increase the liquidity of its shares. The bonus issue of equity shares and ADSs will be subject to approval by the shareholders,and any other applicable statutory and regulatory approvals.

The bonus shares once allotted shall rank pari passu in all respects and carry the same rights as the existing equity shareholders and shall be entitled to participate in full,in any dividend and other corporate action,recommended and declared after the new equity shares are allotted.

3. Addition to the Board

The Board appointed Michael Gibbs as an Independent Director of the Company effective July 13,2018 for a period of three years,based on the recommendation of the Nomination and Remuneration Committee of the Board.

4. Assets Held for Sale

During the three months ended June 30,on remeasurement,including consideration of progress in negotiations on offers from prospective buyers for Panaya,the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to $39 million in respect of Panaya. Consequently,profit for the three months ended June 30,2018 has decreased by $39 million resulting in a decrease in Basic earnings per equity share by $0.02 for the quarter ended June 30,2018.

5. Adoption of Ind AS 115 - Revenue from contracts with customers

Effective April 1,the Company adopted Ind AS 115 "Revenue from Contracts with Customers" using the cumulative catch-up transition method which is applied to contracts that were not completed as of April 1,2018. Accordingly,the comparatives have not been retrospectively adjusted. The effect on adoption of Ind AS 115 was insignificant.

6. Voluntary delisting of American Depositary Shares from Euronext Paris and London

In line with the announcement made on June 11,the Company has voluntarily delisted its American Depository Shares ("ADSs")(ISIN US4567881085) from Euronext Paris and London on July 5,2018 and its ADS were removed from Euroclear France on July 10,2018. The primary reason for voluntary delisting from Euronext Paris and London was the low average daily trading volume of Infosys ADSs on these exchanges,which was not commensurate with the related administrative expenses. Infosys ADSs will continue to be listed on the NYSE under the symbol "INFY" and investors can continue to trade their ADSs on the New York Stock Exchange.

About Infosys

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 45 countries to navigate their digital transformation. With over three decades of experience in managing the systems and workings of global enterprises,we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills,expertise,and ideas from our innovation ecosystem.

Visithttp://www.infosys.comto see how Infosys (NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements mentioned in this release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995,which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include,but are not limited to,risks and uncertainties regarding fluctuations in earnings,fluctuations in foreign exchange rates,our ability to manage growth,intense competition in IT services including those factors which may affect our cost advantage,wage increases in India,our ability to attract and retain highly skilled professionals,time and cost overruns on fixed-price,fixed-time frame contracts,client concentration,restrictions on immigration,industry segment concentration,our ability to manage our international operations,reduced demand for technology in our key focus areas,disruptions in telecommunication networks or system failures,our ability to successfully complete and integrate potential acquisitions,liability for damages on our service contracts,the success of the companies in which Infosys has made strategic investments,withdrawal or expiration of governmental fiscal incentives,political instability and regional conflicts,legal restrictions on raising capital or acquiring companies outside India,and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31,2017. These filings are available at http://www.sec.gov. Infosys may,from time to time,make additional written and oral forward-looking statements,including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.

Infosys Limited and subsidiaries

Audited Condensed Consolidated Balance Sheet as at

(Dollars in millions except equity share data)

June 30,2018

March 31,2018

ASSETS

Current assets

Cash and cash equivalents

2,411

3,041

Current investments

1,004

982

Trade receivables

2,001

2,016

Unbilled revenue

680

654

Prepayments and other current assets

707

662

Derivative financial instruments

5

2

6,808

7,357

Assets held for sale[(3)]

273

316

Total current assets

7,081

7,673

Non-current assets

Property,plant and equipment

1,781

1,863

Goodwill

349

339

Intangible assets

54

38

Investment in associate

-

-

Non-current investments

821

883

Deferred income tax assets

190

196

Income tax assets

884

931

Other non-current assets

246

332

Total non-current assets

4,325

4,582

Total assets

11,406

12,255

LIABILITIES AND EQUITY

Current liabilities

Trade payables

117

107

Derivative financial instruments

20

6

Current income tax liabilities

297

314

Client deposits

27

6

Unearned revenue

340

352

Employee benefit obligations

219

218

Provisions

76

75

Other current liabilities

1,269

1,036

2,365

2,114

Liabilities directly associated with assets held for sale[(3)]

50

50

Total current liabilities

2,415

2,164

Non-current liabilities

Deferred income tax liabilities

74

82

Employee benefit obligations

6

7

Other non-current liabilities

49

42

Total liabilities

2,544

2,295

Equity

Share capital- `5 ($0.16) par value 2,400,000,000 (2,000)

equity shares authorized,issued and outstanding 2,173,336,341

(2,312,301),net of 10,790,750 (10,801,956) treasury shares as at

June 30,2018 (March 31,2018),respectively

190

190

Share premium

253

247

Retained earnings

10,907

11,587

Cash flow hedge reserve

1

-

Other reserves

294

244

Capital redemption reserve

9

9

Other components of equity

(2,792)

(2,317)

Total equity attributable to equity holders of the company

8,862

9,960

Non-controlling interests

-

-

Total equity

8,960

Total liabilities and equity

11,255

Infosys Limited and subsidiaries

Audited Condensed Consolidated Statement of Comprehensive Income for the

(Dollars in millions except equity share and per equity share data)

Three months ended

June 30,2018

Three months ended

June 30,2017

Revenues

2,831

2,651

Cost of sales

1,819

1,692

Gross profit

1,012

959

Operating expenses:

Selling and marketing expenses

149

138

Administrative expenses

193

183

Total operating expenses

342

321

Operating profit

670

638

Other income,net

107

127

Reduction in the fair value of Disposal Group held for sale[(3)]

(39)

-

Share in net profit/(loss) of associate,including impairment[(4)]

-

(11)

Profit before income taxes

738

754

Income tax expense

204

213

Net profit

534

541

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss:

Re-measurements of the net defined benefit liability/asset,net

-

-

Equity instruments through other comprehensive income,net

-

-

Items that will be reclassified subsequently to profit or loss:

Fair valuation of investments,net

(7)

4

Fair value changes on derivatives designated as cash flow hedge,net

1

(10)

Foreign currency translation

(468)

60

Total other comprehensive income/(loss),net of tax

(474)

54

Total comprehensive income

60

595

Profit attributable to:

Owners of the Company

534

541

Non-controlling interests

-

-

534

541

Total comprehensive income attributable to:

Owners of the Company

60

595

Non-controlling interests

-

-

60

595

Earnings per equity share

Basic ($)

0.25

0.24

Diluted ($)

0.25

0.24

Weighted average equity shares used in computing earnings per

equity share

Basic

2,328,621

2,285,657,604

Diluted

2,175,355,178

2,287,058,148

NOTES:

1. Theaudited condensed consolidatedBalance sheet andStatement of Comprehensive Income for the three months ended June 30,2018 have been taken on record at the Board meeting held on July 13,2018

2. A Fact Sheet providing the operating metrics of the Company can be downloaded from http://www.infosys.com

3. During the three months ended June 30,the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to $39 million in respect of Panaya.

4. During the quarter ended June 30,2017,the Company has written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to $11 million

IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/q1/Documents/IFRS-INR-press-release.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/q1/Documents/fact-sheet.pdf