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Infosys posts spectacular performance

Oct 10, 2000

Infosys Technologies Ltd. has announced its results today that were better than market expectations. The 134 % increase in profits of the company in 2QFY01 compared to corresponding previous quarter was higher than analysts expectations. The company has posted quarter on quarter 22% growth in the profits. The company's net margins are declined to 34.5% in the current quarter compared to 35.7% in 1QFY01.

(Rs m)1QFY012QFY01Change
Sales 3,555 4,461 25.5%
Other Income 151 196 29.5%
Profit after Tax/(Loss) 1,268 1,540 21.5%
Net profit margin (%)35.7%34.5%
No. of Shares (eoy) (m)66.166.1
Diluted number of shares66.166.1
Diluted Earnings per share*76.793.1
*(annualised)

The company continues to expand its client base and has added 27 new clients during this quarter. The top 5 customers of the company contributes 24.9% of its total revenues and there are only 2 clients accounting for more than 5% of revenues. Thus Infosys has de-risked its revenue model through well diversified technology mix and limiting client concentration.

At the current market price of Rs 7,316 Infosys is trading at a P/E of 86 times its first half annualised earnings. The company has always enjoyed premium valuations in the market led by its ability to maintain a high growth rate and its high management credibility. The results declared by Infosys may set the trend for valuations in the beaten-down software sector and could trigger buying sentiment.

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