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Infosys: A Decent Operating Performance - Views on News from Equitymaster

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Infosys: A Decent Operating Performance
Oct 24, 2017 | Updated on Oct 25, 2017

India's second largest software firm Infosys has announced its second quarter results for FY18. The company has reported a 2.9% QoQ growth in sales and a 7% QoQ growth in net profit for 2QFY18.

Performance Summary
  • In rupee terms, consolidated sales increased by 2.9% QoQ during 2QFY18. In constant currency terms, sales were up 2.2% QoQ. In US dollar terms, sales were up 2.9% QoQ.
  • Operating profit (EBITDA) was up 3.1 QoQ. The operating margin improved sequentially to 26.8%.
  • The other income was higher by 8.5% QoQ while the profit before tax (PBT) was up 4.1% QoQ.
  • The consolidated net profit came in at Rs 37.26 billion, an increase of 7% QoQ.
  • The company has declared an interim dividend of Rs 13 per share. The record date and payment date for the same are 01 November and 04 November respectively.

    Consolidated Financials
    (Rs m) 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change
    Sales 170,780 175,670 2.9% 340,910 346,450 1.6%
    Expenditure 125,170 128,650 2.8% 249,120 253,820 1.9%
    Operating profit (EBITDA) 45,610 47,020 3.1% 91,790 92,630 0.9%
    Operating profit margin (%) 26.7% 26.8%   26.9% 26.7%  
    Depreciation & Amortisation 4,500 4,560 1.3% 8,240 9,060 10.0%
    Other income 8,140 8,830 8.5% 15,130 16,970 12.2%
    Profit before tax 49,250 51,290 4.1% 98,680 100,540 1.9%
    Tax 13,710 14,030 2.3% 28,220 27,740 -1.7%
    Profit after tax/(loss) 35,540 37,260 4.8% 70,460 72,800 3.3%
    Minority Interest & Others -710 0   -50 -710  
    Net Profit 34,830 37,260 7.0% 70,410 72,090 2.4%
    Net profit margin (%) 20.8% 21.2%   20.7% 21.0%  
    No. of shares         2,297.0  
    Diluted earnings per share (Rs)*         63.2  
    P/E ratio (x)*         14.7  

    *On a trailing 12 months basis


    Segmental Performance
    Rs m 1QFY18 2QFY18 Change
    By service offerings      
    Application development 26,300 27,405 4.2%
    Application maintenance 28,520 28,107 -1.4%
    Business Process Management 8,539 8,959 4.9%
    Infrastructure Management Services 14,346 15,810 10.2%
    Product Engineering Services 7,002 7,202 2.9%
    Testing Services 15,883 16,513 4.0%
    Others 5,294 5,446 2.9%
    Total IT services 105,884 109,442 3.4%
    Consulting, Package Implementation & Others 55,674 57,093 2.5%
    Products, Platforms and Solutions 9,222 9,135 -0.9%
    Total Revenues 170,780 175,670 2.9%
    By new services and software      
    New Services (Cloud, Analytics, API, IoT, Cyber Security) 14,175 16,513 16.5%
    New Software (Edge, NIA, Panaya, Skava) 2,732 2,811 2.9%
    By industry vertical      
    Banking and Financial Services 46,281 47,431 2.5%
    Insurance 10,588 11,243 6.2%
    Manufacturing & Hi Tech 37,913 38,647 1.9%
    Retail & CPG 24,251 24,242 0.0%
    Telecom 17,761 18,270 2.9%
    Energy & Utilities 8,881 9,662 8.8%
    Transportation & Logistics 3,245 3,513 8.3%
    Lifesciences & Healthcare 11,271 11,946 6.0%
    Others 10,588 10,716 1.2%
    By geography      
    North America 104,347 106,456 2.0%
    Europe 38,255 40,755 6.5%
    India 6,148 5,797 -5.7%
    Rest of world 22,031 22,661 2.9%
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