Infosys result analysis
Infosys declared its third quarter result today. The results came better than than the street expectations. The sales were around 3% above the Bloomberg consensus estimate, whereas the net profit was around 12% below, which was boosted on account of higher other income.
BSE : INFOSYS
NSE : INFOSYSTCH
Bloomberg : INFO IS Equity
CMP : Rs. 2,587.45
Sector : IT Services
View : Neutral with positive bias
RESULT HIGHLIGHTS:
- The consolidated net sales for the quarter ended December 09 contracted by 1% to Rs. 5,741 cr, this was mainly on account of recovery by the North American Financial Services Sector
- Its other income grew by a whopping 505% to Rs. 230 cr this was on account of a Rs 20 cr gain from forex transactions as compared to a Rs 218 cr loss in Q3 2008
- Company’s net profit contracted by around 4% to a level of Rs. 1,582 cr, this is mainly on account of a strengthening of rupee on a YoY basis
- Company’s operating margin remained fairly stable around 35.5% on account of increased utilizations
- Company’s diluted EPS fell by around 3%, to Rs. 27.72/ share
- The company plans to be aggressive on the hiring front. It plans to add 6,000 employees to its rolls in Q4. It is comfortable with utilisation between 76-80%
- Its Q4 guidance is muted but has improved compared to the last quarter’s guidance and the company has also increased its full year EPS and revenue guidance both in rupee and dollar terms
- The management says clients are still cautious about the business environment and budgets from the clients side has not been finalised yet
- Dollar Guidance:
- FY10 consolidated revenue seen at USD 4.75-4.76 billion, YoY growth of 1.8%-2.0%.
- FY10 EPS seen at USD 2.26 a share, YoY growth of 0.4%
- Rupee Guidance:
- FY10 revenues seen at Rs 22,473 cr-Rs. 22,519 cr, growth of 3.6% to 3.8%
- FY10 EPS seen at Rs 106.85-107.06, YoY growth of 2.2% to 2.4%
Author: Rahul Sonthalia, Analyst, Kredent Group
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