Infosys Q3 net up 19%, ups FY14 $ rev forecast to 11.5-12%

Consolidated revenue increased 0.47 percent sequentially (up 25 percent Y-o-Y), in-line, to Rs 13,026 crore and dollar revenue climbed 1.6 percent Q-o-Q to USD 2,100 million in the quarter gone by.

According to CNBC-TV18 poll, analysts had expected adjusted net profit of Rs 2626 crore (reported net profit was expected at Rs 2,752 crore) on revenues of Rs 13,055 crore.

Meanwhile, the IT exporter raised its full year (FY14) dollar revenue guidance to 11.5-12 percent from 9-10 percent earlier, which was largely in-line with analysts' expectations of 11-12 percent.

"The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and clients are gaining confidence to invest in their strategic initiatives," S D Shibulal, CEO and managing director said.

Rupee revenues on consolidated basis is expected to grow 24.4-24.9 percent for the current financial year 2013-14, Infosys said in its filing to the exchange. Conversion rupee-dollar rate assumed as 61.81.

Moshe Katri, MD of Cowen and Co expects Infosys to enjoy tremendous earnings power in FY15. He remains positive on the company.

Earnings before interest and tax for the Decmeber quarter (EBIT) rose 14.9 percent, stronger-than-expected quarter-on-quarter to Rs 3,259 crore and EBIT margin expanded by 328 basis points to 25 percent. Analysts had expected EBIT at Rs 3,154 crore and margin at 24.15 percent for the quarter.

Infosys and its subsidiaries added 54 clients during the quarter as against 68 clients in the previous quarter and 89 clients in a year ago period. Active clients increased to 888 in December quarter as against 873 in earlier quarter.

The company won more than 20 deals during third quarter. "Focus on cloud and big data as new growth areas continues to yield results," Infosys said.

Infosys and its subsidiaries added 6,682 employees on gross basis in the quarter gone by, taking the total headcount to 1,58,404 employees as on December 31, 2013.

Liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds increased to Rs 27,440 crore as on December 31, 2013 from Rs 26,907 crore in earlier quarter.

Revenue from BPO business climbed 3.3 percent to USD 136.5 million from USD 132.1 million, quarter-on-quarter and net income grew 31 percent to USD 24.72 million from USD 18.87 milllion Q-o-Q.

Geograhical growth

On sequential basis and in constant currency, revenues from its North America business declined 0.8 percent.

Europe business grew by 5.5 percent Q-o-Q and 3.5 percent in constant currency while Indian business jumped 9.2 percent Q-o-Q and 8.1 percent in constant currency.

Rest of world grew 4.9 percent sequentially and 5.2 percent in constant currency.

Changes in board

During the quarter, the board of directors of the company appointed Kiran Mazumdar-Shaw as an additional (independent) director and U B Pravin Rao as an additional and whole-time director.

Independent director Deepak M Satwalekar retired from the board effective November 13, 2013 and V Balakrishnan, whole-time director resigned from the board and services of the company effective December 31, 2013.