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.
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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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