Infosys has done lot of cost rationalisation and its benefits will start showing up in the December quarter, so its underlying margins will improve, says Kawaljeet Saluja. Kawaljeet Saluja, ED and head of research, Kotak Institutional Equities
Shibulal says that out of 37 clients addition during the quarter, five of which are Fortune 500 companies, adding, "We have closed five-six large deals. Our large deals are mostly USD 50 million and above. It will get realised over the next three-five years. We have top 25 grown by 3.3 percent and non-top 25 has also grown by 3.4 percent or so."
Despite Infy's the good set of numbers, TCS continues to remain Angel Broking's top IT bet follwed by HCL Tech. Infosys is their third-best pick which the brokerage house suggests accumulating at a target price of Rs 3,500
During the period, the IT major's attrition rate increased to 17.3 percent compared to 16.9 percent in the June quarter. It saw net addition of 2,964 employees in the quarter. Overall, 12,168 employees joined Infosys and its subsidiaries during the second quarter.
Hitesh Shah, IT Analyst, IDFC Securities sees FY14 Infosys growth at 0.1%, implying about 12 percent dollar revenue growth for full year. With rupee staying where it is, it should be able to do closer to Rs 190 on recurring earnings per share (EPS) for full year.
This shows that under Murthy, the company is chasing volumes in a tough market where pricing is crucial to bagging contracts from penny-pinching clients.
Shibulal said that the next couple of quarters would be about investing in the business to take it to the next orbit of growth. But he also cautioned that the measures being taken by the company would take a while to translate into growth.
Speaking to CNBC-TV18, Dipan Mehta, member, BSE & NSE, says all the issues that were plaguing the company- management rejigs, growth concerns- have now been addressed.
IT major Infosys today reported a 1.6 percent rise in consolidated net profit to Rs 2,407 crore for the second quarter ended September 30, 2013, on the back of large deals and increased sales from Big Data and Cloud.
JP Morgan says it does not believe that investors must read anything amiss into growth implications for the coming two quarters due to the unchanged USD revenue guidance (at the upper-end).
Moshe Katri, MD, Cowen & Co expects Infosys under the right management team can shape margins going ahead.
Speaking to CNBC-TV18 on Infosys' strong Q2 numbers, Sanjeev Prasad of Kotak Institutional Equities expects the company to perform stronger than the guided 10 percent.
The FY14 guidance for revenues may be raised at lower end of the guidance to 8 percent, feel experts. Meanwhile, the street is divided on whether upper end of guidance will remain at 10 percent or get increased.
According to ICICIdirect.com, Infosys may report a 12.9 percent growth quarter-on-quarter (growth of 13.1 percent year-on-year) in net profit at Rs 2679.5 crore.
IIFL expects the company to post 13 percent profit expansion to Rs 2700 crore and revenue growth of 2.6 percent in dollar terms quarter-on-quarter.
Revenues are seen going up by 13.4 percent to Rs 12,781 crore in second quarter of FY14 from Rs 11,267 crore in previous quarter while dollar revenues may grow 2.6 percent Q-o-Q to USD 2042 million.
Revenues of Infosys are expected to increase by 12.4 percent Q-o-Q (up 28.5 percent Y-o-Y) to Rs 12,662.7 crore, according to Prabhudas Lilladher.
Revenues of Infosys are expected to increase by 12.6 percent Q-o-Q (up 28.7 percent Y-o-Y) to Rs 12,686.7 crore, according to Kotak Securities.
Revenues of Infosys are expected to increase by 13.1 percent Q-o-Q (up 29.2 percent Y-o-Y) to Rs 12,738.5 crore, according to Motilal Oswal.
Dolat Capital expects Infosys to report 7.5 percent growth quarter-on-quarter (growth of 7.7 percent year-on-year) in net profit at Rs 2550.9 crore.
Wipro is likely to report a Rupee revenue growth of 3 percent to Rs 9,917 crore. In US Dollar terms, revenue from IT services is seen up 0.2 percent to USD 1.59 billion.
IT analyst Rumit Dugar said that one can look to play TCS, Infosys, Tech Mahindra using a three-pronged strategy.
TCS management says it is confident that pricing will remain stable for the next 12 months and the next quarter won't see any decline in realisation.
Infosys reported better-than-expected earnings in the first quarter, prompting brokerages to raise their earnings estimates for the current financial year. However, many say Infy's performance will have to be consistent over the next few quarters for them to upgrade the stock.
Infy is now focusing more on commoditised services. They have a good position in terms of margins and spend. They are now better poised at least for the short term in terms of three years from now, in terms of winning any of the rebids