Beating market performance has become a routine performance for the Indian software major. Infosys has reported a jump (QoQ) in topline by 20% and the bottomline has gone by up 8% in 3QFY01. On a YoY basis the net profit has gone up by 143% (excluding other adjustments) and revenues by 136%.
The company has beaten the market expectation of a YoY growth of about 115% in revenues and 127% growth in net profit.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Provision and contingencies
Profit after Tax/(Loss)
Net profit margin (%)
Diluted number of shares
Diluted Earnings per share*
Infosysí excellent performance has been masked by writing off Rs 131 m on account of strategic investment in EC Cubed Inc, a US based provider of B2B e-commerce solutions. The company has filed for liquidation. Had this figure been excluded then net profits QoQ would have been up by 16%.
*Excluding extra ordinary items
Infosysí operating margins have gone up 40.5% and net profit margin excluding extra ordinary item was 33.4% compared to 34.5% in 2QFY01. This was due to fall in other income by 26%. Other income of 2QFY01 included gains from forex Rs 96.8 m, which dropped to Rs 34.4 m in 3QFY01. The other component of interest and others, was Rs 110.3 m for 3QFY01 compared to Rs 98.9 m.
The improvement in operating margins could be attributed to higher billing rates and operating efficiencies.
At the current market price of Rs 6,007, Infosys is trading at a P/E multiple of 60 times its 3QFY01 annualised earnings. We had projected revenues of Rs 17,646 m for FY01. For nine-month the company has already clocked sales of Rs 13,387 m. Revenues for 4QFY00 were Rs 2,774 m and a conservative YoY 100% growth would mean sales of Rs 4,548 for the quarter ending March 2001. This indicates that the company would be able to record a growth of more than 100% in both revenues and profits for FY01.
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