Moneycontrol
Jul 14, 2017 10:04 AM IST | Source: Moneycontrol.com

Infosys surprises D-Street! Top 10 takeaways for June quarter results

The Q1 revenues grew sequentially by 3.2 percent in USD terms to $2651 million and 2.7 percent in constant currency terms. The revenues grew 6 percent on a year-on-year basis in USD terms.

ByKshitij Anand
Infosys surprises D-Street! Top 10 takeaways for June quarter results

Kshitij Anand

Moneycontrol News

Infosys reported better than expected results for the quarter ended June 30 on most parameters.

Reacting to the results, the share of the IT major was trading 1.3 percent higher at Rs989.40.

“Our persistent focus on execution in Q1 is reflected in broad-based performance on multiple fronts– revenue growth, resilient margins despite multiple headwinds, healthy cash generation and overall business results,” Dr. Vishal Sikka, CEO, Infosys said in a statement.

“I am encouraged by the uptick in revenue per employee for six quarters in a row, and the strong momentum in our new high-growth services and software, as we accelerate our focus on innovation-led growth,” he said.

We have collated a list of ten takeaways from Infosys Q1 results:

Net profit:

Infosys reported a net profit of Rs3483 crore for the quarter ended June, up 1.4 percent on a year-on-year (YoY) basis. The net profit was higher than a CNBC-TV18 poll of Rs3,436 crore.

Infosys reported a net profit of Rs3,436 crore in the corresponding quarter of last fiscal. On a sequential basis, net profit slipped by 3.3 percent. The net profit for the quarter ended March stood at Rs3,603 crores.

Rupee Revenues:

The rupee revenue rose by 1.8 percent on a YoY basis to Rs17,078 crores which were higher than a CNBC-TV18 poll of Rs17,014 crores. Infosys reported a rupee revenues of Rs 16,782 crores in the corresponding quarter of last fiscal.

However, on a sequential basis, rupee revenues declined marginally by 0.2 percent. Infosys reported rupee revenue of Rs17,120 in the March quarter.

Dollar Revenue:

The Q1 revenues grew sequentially by 3.2 percent in USD terms to $2651 million and 2.7 percent in constant currency terms. The revenues grew 6 percent on a year-on-year basis in USD terms.

FY18 Revenue Guidance:

FY 18 revenue guidance retained at 6.5%-8.5% in constant currency. FY 18 operating margin guidance retained at 23%-25%.

Outlook:

Infosys expects revenues to grow 6.5%-8.5% in constant currency. Revenues are expected to grow 7.1%-9.1% in USD terms based on the exchange rates as of June 30, 2017.

Operating Profit:

Infosys operating profit was slipped by 2,4 percent on a QoQ basis at Rs4,111 crore for the quarter ended June 30, 2017, but was still higher than a CNBC-TV18 poll of Rs4025 crore. However, on a YoY basis, operating profit grew by 1.6 percent.

Geography Segment growth:

North America grew by 1.3 percent both sequentially and in constant currency while Europe grew by 4.7 percent sequentially and 3.1 percent in constant currency terms.

India grew by 14.2 percent sequentially and 11.2 percent in constant currency and the rest of the world grew by 7.3 percent sequentially and by 6.9 percent in constant currency terms.

Growth in Industry Segment:

BFSI grew by 2.6 percent sequentially and 2 percent in constant currency. The MFG & Hi-Tech grew by 2 percent sequentially and 1.5 percent in constant currency terms.

The RCL grew by 3.1 percent sequentially and 2.6 percent in constant currency while ECS grew by 5.5 percent sequentially and 4.9 percent in constant currency terms.

Attrition Rate:

The standalone attrition rate for the quarter rose to 16.9 percent compared with 13.5 percent in the previous quarter while consolidated attrition rate was also up at 21 percent from 17.1 percent. Utilization excluding trainees increased by 2 percent to 84 percent.

Cash Flows:

Operating cash flow stood at $644 million, as compared to $ 547 million in Q417. Liquid assets including cash and cash equivalents and investments stood at $6,091 million as on June 30, 2017, as compared to $5,979 million as on March 31, 2017

“Our relentless focus on strong cash generation led to a healthy operating cash flow. Further, our continued emphasis on operational efficiencies enabled us to mitigate the impact of margin headwinds during the quarter,” said M. D. Ranganath, CFO.

“We successfully navigated yet another quarter of significant currency volatility through our hedging,” he said.
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