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Infy 3QFY02: In line with expectations - Views on News from Equitymaster
 
 
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  • Jan 10, 2002

    Infy 3QFY02: In line with expectations

    Infy continuing with its tradition has once again beaten its own guidance. However, the results are in line with market expectations. For 3QFY02, the company has clocked a 1.6% sequential (QoQ) growth in revenues and a rise of 2.2% in the bottomline. On a YoY basis, the company’s topline has grown by 23% and the net profits have recorded a 23.8% growth.

    However, the company has indicated of a very tough fourth quarter. It expects revenues to decline sequentially (QoQ) by 3.8% for the quarter ending March 2002 from its existing business.

    (Rs m) 2QFY02 3QFY02 Change
    Sales 6,501 6,608 1.6%
    Other Income 147 149 1.8%
    Expenditure 3,912 3,934 0.5%
    Operating Profit (EBDIT) 2,589 2,675 3.3%
    Operating Profit Margin (%) 39.8% 40.5%  
    Interest - -  
    Depreciation 390 413 5.9%
    Profit before Tax 2,346 2,410 2.8%
    Tax 330 350 6.1%
    Provision and contingencies - -  
    Profit after Tax/(Loss) 2,016 2,060 2.2%
    Net profit margin (%) 31.0% 31.2%  
    Diluted number of shares 66.1 66.1  
    Diluted Earnings per share* 122.0 124.7  
    P/E (x)   35.6  
    *(annualised)      

    The strong positive that has come out of the results is that Infy’s operating margins have jumped by 70 basis points. This has been possible due to the company managing to control its costs, as the growth in volumes, has been offset by decline in realisations. While the company has seen a 3.4% growth in volumes, blended billing rates have declined by 3.2%.

    At the current market price of Rs 4,436 the stock is trading at a P/E multiple of 36x its 3QFY02 annualised earnings. The stock is witnessing downside as the markets were expecting an affirmation of their expectations of a recovery in the technology sector from this result. But all the numbers indicate is that the uncertainty still continues.

     

     

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