Infosys: Meets expectations - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Infosys: Meets expectations

Apr 10, 2002

Infosys has posted a sequential (QoQ) topline growth of 3% for 4QFY02 and net profits have grown by 2%. This translates to a YoY growth (compared to 4QFY01) of 21% in revenues and a 16% in bottomline. The numbers are in line with the market expectations. The revenues for FY02 have grown by 37% and the net profit figure has risen by 29%. The company’s operating margins declined by 0.7% in 4QFY02, QoQ. This is due to the pricing pressure that the company has been witnessing. The billing rates have declined by 4.8% in 4QFY02 as compared to 3.2% in 3QFY02. During the quarter the company saw a volume growth of 6.3%. For the full year FY02 operating margins declined by 0.3%.

(Rs m) 3QFY02 4QFY02 Change FY01 FY02 Change
Sales 6,608 6,801 2.9% 19,006 26,036 37.0%
Other Income 149 233 56.3% 594 664 11.9%
Expenditure 3,934 4,094 4.1% 11,357 15,660 37.9%
Operating Profit (EBDIT) 2,675 2,707 1.2% 7,648 10,376 35.7%
Operating Profit Margin (%) 40.5% 39.8%   40.2% 39.9%  
Interest - -   - -  
Depreciation 413 448 8.4% 1,129 1,607 42.3%
Profit before Tax 2,410 2,493 3.4% 7,113 9,434 32.6%
Tax 350 389 11.2% 727 1,354 86.3%
Provision and contingencies - -   (98) -  
Profit after Tax/(Loss) 2,060 2,103 2.1% 6,288 8,080 28.5%
Net profit margin (%) 31.2% 30.9%   33.1% 31.1%  
Diluted number of shares 66.1 66.1   66.1 66.1  
Diluted Earnings per share* 124.7 127.3   95.1 122.2  
P/E (x)   29.1     29.7  
*(annualised)            

Revenues of the banking business unit of the company have grown by more than 100% during the fiscal to touch Rs 1 bn (US$ 20 m). The client list for Infosys’ banking product Finacle includes ABN Amro, IDBI Bank and ICICI. The company also acquired a CRM (customer relationship management) product called SimpleRM for a price of Rs 48.5 m (US$ 1 m). The product will be integrated with Finacle and will thus enhance its functionality.

The company added 29 new clients during the quarter as compared to 33 clients added in 3QFY02. The list of clients added during the quarter includes Cardiff, Daimler Chrysler and Fujitsu. Among the telecom clients the company continues to face weakness especially in the equipment manufacturer segment.

Infosys also made an investment of US$ 5 m (Rs 24.5 m) in separate company that will have interest in the area of business process outsourcing. The initial focus is likely to be in the area of transaction processing and accounting services. While the markets are concerned about Infosys moving into low margin business, the company’s management expects margins from the new initiative to be on the higher side. The new company is likely to start generating revenues from the first two quarters of its operations. Client acquisitions is likely to be easy as Infosys has a huge client base to which it can market its services in the business process outsourcing space.

The company also forayed into the IT outsourcing space by taking over the management of applications for two of its clients. According to one of agreements the company will provide 24x7 support to mission critical applications for a financial services company from India. While this will not only help Infosys deepen its relationship with the client, it will help the company tap the huge outsourcing market. The outsourcing contracts run in hundreds of millions of dollars as spread over several years. (Read more)

FY03 guidance
For 1QFY03, Infosys expects a sequential topline growth in the range to 1%-2%. The EPS for the quarter is expected to be in the range of Rs 31 to Rs 32. This translates to a sequential growth in the range of –2% to 1%.

The company expects revenues to grow in the range of 18% to 22% and the net profit figure is expected to rise by 16% to 19% for FY03. The EPS is expected in the range of Rs 141 to Rs 145 for the next fiscal. At the current market price of Rs 3,698 the stock is trading at a P/E multiple of 25x its FY03 earnings guidance.


Equitymaster requests your view! Post a comment on "Infosys: Meets expectations". Click here!

  

More Views on News

INFOSYS Announces Quarterly Results (2QFY21); Net Profit Up 20.3% (Quarterly Result Update)

Oct 15, 2020 | Updated on Oct 15, 2020

For the quarter ended September 2020, INFOSYS has posted a net profit of Rs 49 bn (up 20.3% YoY). Sales on the other hand came in at Rs 246 bn (up 8.6% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

INFOSYS 2019-20 Annual Report Analysis (Annual Result Update)

Aug 5, 2020 | Updated on Aug 5, 2020

Here's an analysis of the annual report of INFOSYS for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.

INFOSYS Announces Quarterly Results (1QFY21); Net Profit Up 12.4% (Quarterly Result Update)

Jul 16, 2020 | Updated on Jul 16, 2020

For the quarter ended June 2020, INFOSYS has posted a net profit of Rs 43 bn (up 12.4% YoY). Sales on the other hand came in at Rs 237 bn (up 8.5% YoY). Read on for a complete analysis of INFOSYS's quarterly results.

INFOSYS 2018-19 Annual Report Analysis (Annual Result Update)

May 21, 2019 | Updated on May 21, 2019

Here's an analysis of the annual report of INFOSYS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of INFOSYS. Also includes updates on the valuation of INFOSYS.

More Views on News

Most Popular

My Latest Stock Recommendation (Fast Profits Daily)

Oct 9, 2020

How I picked an exciting stock using trends from both the commodity and equity markets.

The 'Seedhi Baat, No Bakwaas' View on ITC (Profit Hunter)

Oct 12, 2020

Is ITC an investment or a speculation at current levels?

How to Shortlist the Best Stocks for Trading (Fast Profits Daily)

Oct 7, 2020

In this video, I'll show you how to identify a confluence of factors in the market which will point you to the best stocks to trade.

The Inflection Point for Defence Stocks is Getting Closer (Profit Hunter)

Oct 9, 2020

Few Indian defence companies could use their engineering capabilities to eventually become global leaders.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

INFOSYS SHARE PRICE


Oct 20, 2020 02:16 PM

TRACK INFOSYS

  • Track your investment in INFOSYS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

INFOSYS - HP COMPARISON

COMPARE INFOSYS WITH

MARKET STATS