Published on 13/01/2018 10:04:27 AM | Source: Angel Broking Pvt Ltd

We maintain our Neutral rating on Infosys Ltd - Angel Broking

Below Is the View On Infosys Ltd  3QFY2018 Result By Ms.Sarabjit Kour Nangra (VP Research- IT, Angel Broking pvt Ltd)

“For 3QFY2018, the company ended up delivering results just in line on the US$ revenue front, while it delivered better than expected on the volume growth front. The volume growth, which came in at 1.6% QoQ, consequently aided the EBIT and PAT coming in higher than expected. During 3QFY2018, company posted a 1.0% sequential growth in US$ revenues to US$2,755mn, in line with expectations. On constant Currency (CC) terms, the company posted a 0.8% QoQ.In rupee terms, revenues came in at INR 17,794cr a QoQ growth of 1.3% QoQ. Volume growth during the quarter was 1.6% QoQ. The volume growth at onsite was 0.4% QoQ, while the offshore volume growth during the quarter was 2.2% QoQ.

In terms of geography, North America posted a 0.7% CC growth, Europe posted a 4.7% QoQ CC growth, India posted a 5.9% QoQ CC growth and ROW posted a 4.0% QoQ CC growth. In terms of Industry, FSI posted a 0.1% QoQ CC growth, MFG posted a decline of 0.1% QoQ CC growth, RCL posted a 1.2% QoQ CC growth and ECS posted a 2.5% QoQ CC growth.

On operating front, the EBITDA margins came in at 24.3% V/s 24.2% expected with an uptick of 10bp QoQ, on back of good volume growth and consequently better employee (excluding trainees) utilization rate of 84.9% V/s 84.7% in 2QFY2018. Attrition (annualized consolidated) during the quarter was 18.7% V/s 21.4% in 2QFY2018. Consequently, PAT came in at INR 3,697cr, de-growth of 0.8% QoQ. Reported PAT came in at INR 5,129cr V/s INR 3,726cr a QoQ growth of 37.6%. The reported PAT came in higher on back of the Tax reversal on back of the APA with US internal Revenue Service. The reported tax reversal amount has been at INR 1,432cr.

In terms of client addition, the company added 7 clients overall. It added, 3 in the US$75mn+, one in US$50mn and one in US$100mn+. Overall, the client additions were strong across the board and the active clients during the quarter were 1191. The Management guidance for the year has remained same at 5.5-6.5% sales growth of in constant currency (CC) terms, while EBIT margins are expected to come in at 23-25%. We maintain our NEUTRAL stance on the stock.”

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