 "Infosys Q3 net up 4.9% q-o-q at Rs 3,250 crore, beats expectations")
Bangalore-based Infosys took the street and the analysts by surprise as its reported better than expected third quarter numbers for FY15. Infosys reported volume growth of 4.2% for the quarter, one of the best in three years.
The company reported healthy net profit growth for the quarter, but the biggest surprise came as it maintained its full-year guidance of 7-9% (on constant currency). The street was expecting that the company will reduce its guidance or maintain it at the lower end of the guidance due to currency volatility and traditionally softer third quarter.
Infosys reported net profit of Rs 3,250 crore for the third quarter ended December 31, 2014, up 4.9% from Rs 3,096 crore in quarter ended September 30, 2014. On a year-on-year basis, Infosys' net profit was up 13%.
The markets cheered the numbers as the company's stock was up by almost 4.84% at the 1.30pm on the BSE. Infosys stock has been the most volatile stock of the day.
The markets cheered the numbers as the company's stock was up by almost 4.84% at the 1.30pm on the BSE. Infosys stock has been the most volatile stock of the day.
“We are excited by several breakthrough results in Q3. Our 'renew and new' strategy, is being received well by our clients and our ecosystem and we are already seeing its early adoption”, said Vishal Sikka, CEO and Managing Director."Based on our strong performance, we are intensifying our efforts to deepen employee engagement, client ecosystem and strengthen our foundation of education as we build a next generation services company that innovates for consistent profitable growth.”
Infosys revenue for the quarter was at Rs 13,796 crore, a growth of 3.4% compared to quarter ended September 30, 2014 and 5.9% on a year-on-year basis. Infosys also managed to improve its margins at 26.7% that grew 60 basis points.
“During the quarter, we saw broad based volume growth, increased utilization and strong client additions”, said U B Pravin Rao, Chief Operating Officer. “We have made 100% variable payout for Q3 and have seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters.”
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The company has expanded its innovation fund from the current $100 million to $500 million to support the creation of a global eco-system of strategic partners. The capital will be used to invest into young companies world-wide innovating in areas such as AI, Automation, Internet of Things, Collaboration and Design.
“We report our revenues in Indian rupees. Global currency has seen huge appreciation in US dollar. That kind of currency fluctuation is difficult to predict. Given that we cannot take a call on currency and we gave 7-9% guidance, we are sticking to it,” said Rajiv Bansal, CFO, Infosys.
The company during the quarter also managed to increase its utilisation. Excluding trainees, the utilisation at 82.7% for the quarter was the highest in 11 years.