With a bit of luck Infosys has done it again: promised less and delivered more. Of course, this time around, the tech major has been helped by the depreciation of the rupee. The Bangalore-based firm has upped its earnings guidance for the current year, FY09, to 99.3-101.06 per share, a significant rise from what was announced earlier. Thus, earnings will grow by about 21 per cent for the year, which is creditable, given the weak global environment. That could result in a re-rating for the stock given that the rupee is now expected to stay at current levels or depreciate further. Moreover, even if the market remains weak, Infosys is likley to be an outperformer. Guidance for the second quarter has been revised upwards to Rs 23.50-23.95.
The number of clients added duirng the quarter at 49 is one of the highest in a long time. Thus the revision of the earnings guidance has probably been prompted by propsects for better volume growth, probably some margin expansion and therefore better earnings visibility.
Infosys topline growth for the June quarter of 4854 crore, 6.8 per cent higher sequentially, a tad below expectations but the net profit of Rs 1302 crore is way ahead of both the company's guidance and expectations. The reported earnings per share for the June quarter at Rs 22.7 is way higher than the guidance of Rs 20.7. The operating margins at 30.47, however, have been hit by about 200 basis points, due to higher salary costs and visa costs, typical for the first quarter.
Infosys had earlier guided a revenue growth of about 20 per cent to Rs 20,000 crore and a growth in earning per share (eps) by 16.3-18.2 per cent to Rs 92.30-93.90.
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