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Infosys Beats Market Math Yet Again

Industry experts are largely gung-ho about the results and its implications, both for Infosys and the industry at large.

Published: 16th April 2016 03:19 AM  |   Last Updated: 16th April 2016 03:19 AM   |  A+A-

infy beats

BENGALURU: Infosys Ltd lived up to its reputation and proved wrong, yet again, the market expectation, as it reported a growth of 16.2 per cent in its consolidated net profit at Rs 3,597 crore for the quarter ended March 31,2016.

India’s second largest IT firm, next only to Tata Consultancy Services (TCS) in terms of revenue, had reported a net profit of Rs 3,097 crore in March 2015.

The firm’s net profit was above analysts’ expectations, predicted at the Rs 3,500 crore mark, while turnover has also risen by 23.4 per cent to Rs 16,550 crore as against the same period last year. Net profit and revenues also rose sequentially (see chart).

infy.JPGMore importantly, however, is the company’s outlook for the current financial year. With its expectations of sales growth being pegged at between 11.8 per cent and 13.8 per cent in US dollar terms for FY 2016-17, the dollar guidance is comfortably more than industry body NASSCOM’s own guidance for the year, 10 -12 per cent for IT services exports. The optimism holds in constant currency terms too, growth of revenues expected to be between 11.5 per cent and 13.5 per cent.

CEO Vishal Sikka’s statement also toes the line with the company’s optimism. “When I look at the trajectory of innovation initiatives, the large deal wins and the pipeline that we see, we feel good about future,” he stated. CFO M D Ranganath was also positive in his observation of company growth.

“Our growth trajectory improved in FY16……. We will continue to focus on leveraging operational efficiency levers for consistent profitable growth,” he said.

Industry experts are largely gung-ho about the results and its implications, both for Infosys and the industry at large.

“Infosys can carry on the momentum as long as it continues its current strategy,” an analyst  said adding “Other firms stuck in a traditional IT services business may not do as well.”

Some, however, like Trip Chowdhry of Global Equities Research say that while the outlook looks positive, durability of growth remains in question.

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