The IT firm has maintained its full year constant currency revenue growth guidance at 5.5-6.5 percent and EBIT margin at 23-25 percent.
Country's second largest software services provider Infosys has reported a whopping 37.6 percent growth in Q3 profit, with retaining full year revenue guidance.
The profit for the quarter, which was largely driven by tax reversal, stood at Rs 5,129 crore against Rs 3,726 crore in previous quarter, the company said in its filing.
"During the quarter, on account of conclusion of an Advance Pricing Agreement with the US Internal Revenue Service, the company has reversed income tax expenses provision of USD 225 million (Rs 1,432 crore) which pertains to previous periods which are no longer required," it explained. Hence, current tax expenses provision reduced to Rs 144 crore from Rs 1,471 crore QoQ.
The IT firm has maintained its full year constant currency revenue growth guidance at 5.5-6.5 percent and dollar revenue at 6.5-7.5 percent. EBIT margin forecast also retained at 23-25 percent for FY18.
Revenue from operations in Q3FY18 grew by 1.3 percent sequentially to Rs 17,794 crore while revenue increased QoQ by 1 percent in dollar terms (at USD 2,755 million) and 0.8 percent in constant currency terms."Q3 performance is strong. We had 8 percent year-on-year growth and 24.3 percent operating margin with USD 593 million of free cash flow,"
Salil Parekh, CEO & MD said.
Salil Parekh took charge as CEO & MD of the country's second largest IT company on January 2, 2018.
"Infosys results were largely inline for the quarter with a volume growth of 1.6 percent for the quarter. We would now look forward to New CEO commentary on strategic roadmap going forward," Emkay Global said while maintaining Reduce rating on the stock.
Numbers were largely in line with estimates. Profit (excluding tax reversal) was estimated at Rs 3,609 crore on revenue of Rs 17,823 crore for the quarter while dollar revenue and constant currency revenue were estimated to grow around 1 percent each QoQ, according to average of estimates of analysts polled by CNBC-TV18.
Revenue growth was driven by RCL (retail, CPG & logistics) and ECS (energy, utilities, communications and service) segments while FSI (financial services and insurance) growth remained muted, slowing down to 0.3 percent QoQ.
Geography-wise, Europe and North America aided Infosys' business while India and Rest of World disappointed.
During the quarter, Infosys has added 1 client in USD 100 million band, 3 in USD 75 million and 1 in USD 50 million category.
It has also added 1 client in USD 25 million band, 12 in USD 12 million and 4 in USD 5 million band. Total active clients increased to 1,191 at the end of December 2017, from 1,173 in September.
Operating profit (EBIT-earnings before interest and tax) margin has seen expansion of 10 basis points at 24.3 percent during the quarter, which was better compared to 24.1 percent expected by analysts.
EBIT during the quarter grew by 1.7 percent sequentially to Rs 4,319 crore.
“Operating margins were stable on the back of broad-based improvement in operational efficiency parameters. Our cash generation continued to be robust during the quarter," MD Ranganath, CFO said.
Cash flow from operating activities was higher at USD 657 million in Q3, compared to USD 441 million in previous quarter.
Infosys said utilisation excluding trainees was at all-time high of 84.9 percent for quarter ended December 2017.
Standalone attrition during the quarter declined to 15.8 percent, from 17.2 percent in September quarter and consolidated attrition also slipped to 18.7 percent from 21.4 percent on sequential basis.
The second largest IT major has added 3,251 employees (on net basis) during the quarter, taking total headcounts to 2.01 lakh at the end of December 2017.
The stock rallied 15.6 percent during the quarter, outperforming Nifty IT index (up 11.4 percent) and Nifty50 (7.6 percent).The stock price recovered in late trade on Friday to close higher by 0.26 percent at Rs 1,078.40 on the BSE.