Infosys Posted Good Numbers
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Rama Krishna Vadlamudi,
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“Under promise and over achieve,” is the
corporate mantra of Infosys Limited, the second largest IT services company in India . The
company has stuck to its mantra by posting results higher than its guidance
during the second quarter of July-September 2011. The pleasant surprise from
the company has boosted the share price by about seven per cent on 12 October
2011, the day the quarterly were declared. Of course, the performance is aided
in part by the favourable exchange rate between dollar and Indian rupee. The
stock is expected to give decent returns to investors.
The second
quarter results are much better than the market expectations and are given
below:
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Sep.11
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Jun.11
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% Rise
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Sep.10
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% Rise
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Rs Crore
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Rs Crore
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Rs Crore
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Sales
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8 099
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7 485
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8.2
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6 947
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16.6
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Net
Profit
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1 906
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1 722
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10.7
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1 737
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9.7
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The highlights of
the July-September Quarter Results are:
ü Sales
have gone up by 8.2% on a sequential basis and 16.6% on year-on-year basis
ü Net
profit has grown by 10.7% on a sequential basis and 9.7% y-o-y basis
ü In
constant currency terms, the revenue growth is five per cent
ü The
company has added 45 new clients during the 2nd quarter
ü Operating
margin has improved to 28% from 26.1%
ü The
rupee depreciation against the dollar of 10 per cent in the last two months has
helped the company partly in posting good performance
ü Company
is facing tough times due to high unemployment in the US though it is
not seeing any project cancellations
ü Sixty-five
per cent of the total business is from the US
ü Cash
& cash equivalents are Rs 18,536 crore as on 30Sep2011
ü Total
employees are 1,41,822 as on 30Sep2011
Higher guidance
For the full year 2011-12, the management
has hiked its revenue guidance in rupee terms to Rs.33,501-Rs.34,088 crore, as
against its previous guidance of Rs.31,777-32,311 crore, indicating a growth of
21.8-24.0 per cent year-on-year, as against its earlier guided growth of
15.5-17.5 per cent year-on-year. The management has also raised its EPS
(earnings per share) guidance to Rs.143.02-145.26, as against its previous guidance
of Rs.128.20-130.08, showing an increase of 19.7-21.6 per cent y-o-y, as
against its earlier guided growth of 7.3-8.9 per cent y-o-y.
Valuation
The
current market price of the stock is Rs 2,700 as the close of 13 October 2011
when the Sensex closed for the day at 16,884 and Nifty at 5,078. The forward
P/E for FY2011-12 ratio works out to 18.60.
Though the
company is cautious about the uncertain global environment, investors can bank
on the blue chip company’s share while keeping a close watch on the
dollar-rupee exchange rate and global developments. The company is strongly
placed to weather the global head winds and is expected to provide decent
returns.
The current
performance trend of the company indicates that it will get revenue boost from
large orders going forward. The company’s margins too are likely to improve in
the next few quarters due partly to the rupee depreciation against the dollar.
- - -
Note on author: Author is an investment
analyst and writer. The views are personal and this is written only for
information purpose. The author has a vested interest in the stock markets.
Readers are advised to consult their certified financial adviser before taking
any investment decisions.
Author’s articles on financial articles can be
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