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Infosys: A Decent Quarter - Views on News from Equitymaster
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Infosys: A Decent Quarter
Jan 13, 2017

India's second largest software firm Infosys has announced its third quarter results for FY17. The company has reported a 0.2% QoQ fall in sales and a 4.6% QoQ rise in the net profit for 3QFY17.

Performance summary
  • In rupee terms, consolidated sales decreased by 0.2% QoQ during 3QFY17. In US dollar terms and constant currency terms, sales were down 1.4% QoQ and 0.3% QoQ respectively. Volumes were up 0.2% QoQ.
  • Operating profit was up 0.7% QoQ. The operating margin improved to 27.6%.
  • The other income was higher by 7.9% QoQ while the profit before tax (PBT) was up 1.7% QoQ.
  • The consolidated net profit came in at Rs 36.790 bn, an increase of 4.6% QoQ.

    Consolidated Financial Snapshot
    (Rs m) 2QFY17 3QFY17 Change 9MFY16 9MFY17 Change
    Sales 173,100 172,730 -0.2% 458,910 513,640 11.9%
    Expenditure 125,770 125,060 -0.6% 334,510 374,180 11.9%
    Operating profit (EBITDA) 47,330 47,670 0.7% 124,400 139,460 12.1%
    Operating profit margin (%) 27.3% 27.6% 27.1% 27.2%
    Depreciation & Amortisation 4,240 4,330 2.1% 10,400 12,570 20.9%
    Other income 7,600 8,200 7.9% 23,510 23,330 -0.8%
    Profit before tax 50,690 51,540 1.7% 137,510 150,220 9.2%
    Tax 14,600 14,460 -1.0% 38,570 42,680 10.7%
    Profit after tax/(loss) 36,090 37,080 2.7% 98,940 107,540 8.7%
    Minority Interest 30 0 20 50 150.0%
    Other Comprehensive Income -890 -290 1,990 -970
    Net Profit 35,170 36,790 4.6% 100,910 106,520 5.6%
    Net profit margin (%) 20.8% 21.5% 21.6% 20.9%
    No. of shares 2,296.9
    Diluted earnings per share (Rs)* 62.4
    P/E ratio (x)* 15.7

    * On a trailing 12-months basis


    Segmental Performance
    Rs m 2QFY17 3QFY17 Change
    By service offerings
    Application development 27,004 26,773 -0.9%
    Application maintenance 31,331 29,364 -6.3%
    Business Process Management 8,482 8,464 -0.2%
    Infrastructure Management Services 14,540 14,855 2.2%
    Product Engineering Services 6,405 6,736 5.2%
    Testing Services 15,925 15,718 -1.3%
    Others 5,020 5,182 3.2%
    Total IT services 108,707 107,093 -1.5%
    Consulting, Package Implementation & Others 55,565 55,965 0.7%
    Products, Platforms and Solutions 8,828 9,673 9.6%
    Total Revenues 173,100 172,730 -0.2%
    By industry vertical
    Banking and Financial services 47,429 46,983 -0.9%
    Insurance 9,867 10,537 6.8%
    Manufacturing & Hi Tech 38,948 38,864 -0.2%
    Retail & CPG 25,792 25,219 -2.2%
    Telecom 16,271 15,718 -3.4%
    Energy & Utilities 8,309 8,637 3.9%
    Transportation & Logistics 3,289 3,455 5.0%
    Lifesciences & Healthcare 11,598 11,918 2.8%
    Others 11,598 11,400 -1.7%
    By geography
    North America 106,457 107,093 0.6%
    Europe 38,948 38,346 -1.5%
    India 5,885 5,873 -0.2%
    Rest of world 21,811 21,419 -1.8%

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