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Infosys raises revenue guidance, but third-quarter profit misses estimate

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Mumbai: Infosys Ltd, India’s second-biggest IT services company, on Friday raised its revenue growth forecast on the back of robust demand for its core services as well as its latest digital offerings from its Western clients.

Bengaluru-headquartered Infosys upped its revenue growth guidance to 8.5-9 per cent in constant currency terms for the fiscal year ending March 2019, from 6-8 per cent previously.

The company has a healthy pipeline of projects and deal wins across all its segments, Chief Executive Salil Parikh told a news conference.

 

“Our segments are doing well, both of our main digital and core services are doing well and that’s giving us some confidence for the guidance for revenue,” Parikh said.

For the quarter to the end of December, Infosys reported a 29.6 per cent fall in net profit to 36.09 billion rupees ($512 million). That compared with the 41.31 billion rupees average of 25 analyst estimates compiled by Refinitiv Eikon.

A year earlier, Infosys made a profit of 51.29 billion rupees, helped by tax benefits from the company’s deal with the US Internal Revenue Service, it said in a statement here

Infosys’ bigger rival Tata Consultancy Services Ltd reported a record quarterly profit for October-December.

Infosys said revenue from operations in the quarter rose 20.3 per cent year-on-year to 214 billion rupees in what is usually a seasonally weak period for Indian IT firms due to a long holiday season in the West.

The company’s operating margin declined 110 basis points to 22.6 per cent even though it retained the margin guidance in the band of 22-24 per cent.

Infosys said it was “no longer highly probable” that the sale of its units Kallidus & Skava and Panaya would be completed by the end of March.

Total expenses in the quarter surged over 26 per cent to 170.21 billion rupees, which included an additional depreciation and amortization charge of $12 million and a reduction of $65 million in the carrying value for its Skava units.

It also approved a buyback of shares worth 82.60 billion rupees as part of its capital allocation policy.


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India to post Customs intelligence officers in China to check financial frauds

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New Delhi: India has decided to post Customs intelligence officers in China in its effort to check black money, trade-based money laundering and other financial frauds, officials said.

Two posts of the Customs Overseas Intelligence Network (COIN) have been created in the Indian Embassy in Beijing and in the Consulate General of India at Guangzhou, they said.

The Finance Ministry has begun the process to select officers for the postings.

 

The move has been initiated by the Directorate of Revenue Intelligence (DRI), the lead agency to check Customs frauds and smuggling, to curtail incidents of trade-based money laundering and other financial frauds originating from China, the officials said.

COIN officers are usually mandated to pass on intelligence or information gathered from their respective positing stations overseas to help Indian intelligence agencies – mainly DRI – check trade-related frauds, they said.

“COIN officers play an important role in checking trade-based money laundering, black money and tax evasion by sharing intelligence with Indian agencies. Since a significant import and export is done between India and China, it was considered imperative to expand the snoop network to China,” an official said, wishing anonymity.

In the past, Customs authorities in India have detected a few cases of smuggling to and from China, he said.

COIN officers have been posted in several countries, including Nepal, Singapore, Brussels, the US and the UK, to help Indian authorities check smuggling, the officials said.

The selection process involves concurrence by the Ministry of External Affairs and final approval by the Prime Minister Narendra Modi-headed Appointments Committee of the Cabinet, they said.

Giving details of the process, the officials said an evaluation committee comprising directors general of DRI, Directorate General of Goods and Services Tax Intelligence, National Academy of Customs, Excise and Narcotics and the Directorate General of Human Resource Development will evaluate the service records of concerned officers for posting.

A high-level committee comprising the chairperson, two members of the Central Board of Indirect Taxes and Customs and the director general of DRI will interview the officers, they said.

The board will then recommend a panel of three officers for each post to Finance Minister Arun Jaitley.

After obtaining the finance minister’s approval, the panel will be forwarded to the Ministry of External Affairs for its concurrence followed by a reference to the Appointments Committee of the Cabinet for final approval, the officials said.

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SEBI mulls reducing rights issue listing time

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Kolkata: After reducing time to list shares on the stock exchanges post-closure of initial public offerings (IPOs), markets regulator SEBI is aiming to cut down the time for listing of rights issue shares, an official said.

In September last year, the Securities and Exchange Board of India (SEBI) decided on reducing the time to list shares on the bourses after IPO to 3 days from the present 6. The SEBI directive is likely to come into effect from July this year. SEBI had cited mitigating external risks such as market volatility and uncertainty of financial markets as the reason behind the move.

“SEBI aims to reduce the listing of IPO shares to 3 days from 6 days now. It is supposed to be introduced for IPOs from July 2019 onwards. Now, the regulator is working on simplifying the rights issue process,” Central Depository Services (India) Ltd (CDSL) VP (operations) Nitin Ambure told PTI. “I hope the number of days for listing the rights issue shares may come down to 8-10 days from about a month now. This may happen in phases, also depending on the regulator’s final decision,” he said.

 

Ambure was in the city to participate at a discussion on demat of unlisted shares at the Merchants’ Chamber of Commerce here. The markets regulator has involved stakeholders such as depositories and transaction advisors in the rights issue listing simplification process, just like it engaged exchanges and depositories for IPO shares, he said.

From April onwards, Unified Payments Interface (UPI) will be introduced as an alternative payment option for retail investors and SEBI has already cleared a proposal on it. National Electronic Funds Transfer (NEFT) is also being tested.

Analysts said the new payment mechanisms will make Applications Supported by Blocked Amount (ASBA) mechanism less attractive to investors. ASBA was introduced by the regulator so an investor does not lose out interest component on the application money.

Earlier, the process of normal allotment of shares for IPOs took almost a month. Ambure said SEBI had granted relaxation for processing Demat Request Number from the current 15 days to 30 days in the wake of unusual surge in requests for dematerialisation in recent months. As of now, the transfer of shares in the demat form is mandatory.

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L&T may spend about USD 1 billion in Mindtree takeover bid: report

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Mumbai: Indian conglomerate Larsen & Toubro Ltd would spend up to 70 billion rupees (USD 1.02 billion) in a hostile bid to buy IT services company Mindtree Ltd, the Times of India (TOI) reported citing sources directly involved with the matter.

L&T will buy out Mindtree’s largest shareholder VG Siddhartha and companies in which he is a promoter, following which an open offer will be sent to the public shareholders of Mindtree, according to the report published on Monday.

The AM Naik-helmed L&T is buying Siddhartha’s nearly 21 per cent stake for over 30 billion rupees, at 981 rupees a share, which will make it Mindtree’s largest shareholder. Following this, L&T will trigger an open offer for another 26 per cent from public shareholders, the report said.

 

Siddhartha, who is a promoter of Coffee Day Enterprises Ltd and Coffee Day Trading Ltd, holds a 3.33 per cent stake in Mindtree as of December-end, BSE data showed. Coffee Day Enterprises and Coffee Day Trading carry a combined 17.08 per cent stake in Mindtree.

Mindtree was not immediately available for a comment while L&T said they did not comment on market speculations.

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