India’s IT major Infosys Q3 net profit came in at Rs 5,129 crore, as against Rs 3,599 crore in the same period previous fiscal, far beating analyst estimates by leaps and bounds.
India’s IT major Infosys Q3 net profit came in at Rs 5,129 crore, as against Rs 3,599 crore in the same period previous fiscal, far beating analyst estimates by leaps and bounds. A CNBC TV18 poll had expected the company to post net profit of Rs 3,609 crore, down 3.14 percent compared to Rs 3,726 crore in previous quarter. Notably, the company reversed income tax expense provisions of Rs 1,432 crore on US IRS agreement. The company’s revenue remained flat at Rs 17,794 crore in the quarter under review as against Rs 17,723 crore in the same quarter previous fiscal. EBIT margin came in at 24.3% as against CNBC TV18 poll of 24.1%. The company has maintained FY18 EBIT margin guidance of 23-25% for the year. Infosys retained FY18 CC revenue growth guidance of 5.5-6.5%, in line with expectations.
A CNBC TV18 poll had expected revenue to grow 1.5 percent sequentially to Rs 17,823 crore from Rs 17,567 crore in the previous quarter. Dollar revenue was expected to grow 1 percent to USD 2,754 million from USD 2,728 million QoQ and constant currency growth is expected to be at 1 percent. Notably, this is the first quarterly earnings declared by the company post the appointment of the new CEO Salil Parekh.
“We expect the EBITDA margin to decline by 20 bps on the back of increase in cost of services,” KR Choksey Shares and Securities had said in a note. Most global brokerages had expect Infosys to report a constant revenue growth of 1.2% and maintain a guidance of 5.5-6.5% constant currency revenue growth and 23-25% EBIT margin.
“We expect constant currency revenue growth of 1.2 percent and negligible cross-currency impact. We expect flat EBIT margin; impact of weakness in revenue growth would be offset by operational efficiencies,” Kotak Institutional Equities said in a note.
Infosys had cut its annual revenue forecast to 6.5 percent to 7.5 percent growth for the year ending March 2018 in US dollar terms, versus the 7.6 percent rise analysts were anticipating. Before the internal upheaval involving co-founder Narayana Murthy’s letter addressing governance issues in the organisation, Infosys had forecast a 7.1 percent to 9.1 percent climb in revenue for the year ending March 2018 on a US dollar basis.
“We estimate Infosys to post 1.4 percent QoQ growth in USD terms, impacted 10bps by cross currency, implying 1.5 percent QoQ constant currency (cc) growth. With clients increasingly adopting Nia, Panaya, Skava & Edge, new technologies are expected to drive revenue during the quarter,” Edelweiss Securities had said in a note.