Wednesday, January 13, 2016

#Infosys beats Street Estimates, Q3FY16 net profit up by 2%

Infosys has reported consolidated net profit of Rs. 3,465 crore for the quarter, registering growth of 1.97% qoq and 6.61% yoy. The company’s consolidated revenue stood at Rs. 15,902 crore, clocking growth of 1.70% qoq and 15.26% yoy.It reported consolidated operating profit of Rs. 4,328 crore for the quarter, declining 0.52% qoq but up by 9.45% yoy. Operating profit margin for the current period at 27.21% contracted by 61 bps qoq and 144 bps YoY.

“Infosys’ results beat our estimates for the third successive quarter with CC revenue growth of 1.1% (about 2%, excluding one-off of 2Q) and only a 60bps fall in EBIDTA margins. While the Total Contract Value (TCV) of orders signed was lower due to spill-over, the pipe-line remains strong at $3bn.We believe that, newer initiatives like Zero Distance, Design Thinking, Automation, etc will shore up the growth rates of Infosys and sustain margins over the longer term. Annualized attrition rate has reduced sharply to 18.1% from 19.9% QoQ. We maintain our positive bias on the stock.” 
By Dipen Shah, Senior Vice-President & Head of Private Client Group Research, Kotak Securities