India’s second largest IT firm, Infosys disappointed its investors on Thursday by registering a 2.83 percent drop in consolidated net profit at ₹3,603 crores for Q4 (quarter ended March’17); calculated on the quarter-on-quarter (QoQ) basis. For the previous quarter ended December 2016, Infosys filed net profits worth ₹3,708.

There is a corresponding decline in the company’s revenue as well. The revenue for this quarter declined by 0.89 percent to ₹17,120 crore on a quarterly basis. Compared to the previous quarter, Infosys recorded a 3.44 percent uptick in revenues in January-March period over the same period last year. For the full year – FY17 – the revenue stood at ₹68,484 crore for the company.

Moreover, with the publication of its financial report, the software giant blew off its share prices on the stock exchange as well. The stock for Infosys tumbled by 2.5 percent (₹24 in terms of value) to ₹945 on the NSE. The share prices spiraled as low as ₹941 with a high of around ₹990.

Describing the factors which resulted in such a performance, Vishal Sikka, chief executive officer of Infosys said,

Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance, At the same time, we continued to see many positive signs of our strategy execution; our software led offerings continued to show strong momentum and client success.

He added that with continued adoption of Mana, Infosys’ AI platform; Zero Distance marked its 2-year anniversary as a grassroots cultural movement for innovation with strong client resonance.

In order to please the upset shareholders, Infosys has now announced to return ₹13,000 crore ($2 billion) from its cash reserves as a dividend or share buyback in FY18. The board has announced a dividend of ₹14.75 per share. The decision has been taken as a part of its capital allocation policy which was revised considering the cash requirements in the medium term.

Infosys currently pays dividends of up to 50%, post-tax profits of the financial year. It said that w.e.f FY2018, the company expects to pay out up to 70% of the free cash flow of the corresponding financial year in such manner (including by way of dividend and/or share buyback) as may be decided by the board from time to time, subject to applicable laws and requisite approvals, if any.

It also detailed its forecasts for the ongoing fiscal year. Infosys gave out guidance for 6.5-8.5 % revenue growth in constant currency terms in FY18, which is the lower than the analyst projections of 7-9 per cent growth. The company expects to grow 6.1-8.1% in dollar terms based on the exchange rates as of March 31, 2017. This implies a deceleration based on constant currency revenue growth of 8.3% YoY in FY17. This implies a growth of 2.1%-2.9% QoQ over the next 4 quarters.

Infosys said on Thursday that revenue for the three-month ended 31 March rose to $2.57 billion from $2.55 billion in the preceding quarter. In constant currency terms, the company did not report any growth in revenue sequentially. Net profit declined 0.8% to $543 million from $547 million in the October-December period.

Talking about its arch-rival, Cognizant Technology Solutions Corp. expects to grow between 8% and 10% and follows a January-December financial year — much higher than Infosys.

Apart from announcing its financial plans, Infosys has appointed Ravi Venkatesan as co-chairman of the board. Venkatesan has been an independent director on the board of Infosys since April 2011.On his appointment, R. Seshasayee, Chairman of the Board said in a statement,

He will help me enhance the board engagement in supporting the Management in execution of company’s strategy.

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