Infosys: A Good Operating Performance

India's second largest software firm Infosys has announced its third quarter results for FY18. The company has reported a 1.3% QoQ increase in sales and a 37.7% QoQ rise in the net profit for 3QFY18.

Performance Summary

• In rupee terms, consolidated sales increased by 1.3% QoQ during 3QFY18. In US dollar terms and constant currency terms, sales were up 1% QoQ and 0.8% QoQ respectively. Volumes were up 1.6% QoQ.
• Operating profit was up 2.4% QoQ. The operating margin improved to 27.1%.
• The other income was higher by 8.9% QoQ while the profit before tax (PBT) was up 37.7% QoQ.
• The consolidated net profit came in at Rs 51,290 bn, an increase of 37.7% QoQ. This was largely due to a tax write-back in the US.
• The company concluded its share buyback on 27 December 2017 and 113,043,478 shares were extinguished.
  
  

  Consolidated Financials

  (Rs m)	2QFY18	3QFY18	Change	9MFY17	9MFY18	Change
  Sales	175,670	177,940	1.3%	513,640	524,390	2.1%
  Expenditure	128,650	129,770	0.9%	374,180	383,590	2.5%
  Operating profit (EBITDA)	47,020	48,170	2.4%	139,460	140,800	1.0%
  Operating profit margin (%)	26.8%	27.1%		27.2%	26.9%
  Depreciation & Amortisation	4,560	4,980	9.2%	12,570	14,040	11.7%
  Other income	8,830	9,620	8.9%	23,330	26,590	14.0%
  Profit before tax	51,290	52,810	3.0%	150,220	153,350	2.1%
  Tax	14,030	1,520	-89.2%	42,680	29,250	-31.5%
  Profit after tax/(loss)	37,260	51,290	37.7%	107,540	124,100	15.4%
  Minority Interest & Others	0	0		-50	-710
  Net Profit	37,260	51,290	37.7%	107,490	123,390	14.8%
  Net profit margin (%)	21.2%	28.8%		20.9%	23.7%
  No. of shares					2,183.9
  Diluted earnings per share (Rs)*					73.0
  P/E ratio (x)*					14.8

  *On a trailing 12 months basis

  
  

  Segmental Performance

  Rs m	2QFY18	3QFY18	Change
  By service offerings
  Application development	27,405	27,403	0.0%
  Application maintenance	28,107	28,826	2.6%
  Business Process Management	8,959	9,431	5.3%
  Infrastructure Management Services	15,810	15,659	-1.0%
  Product Engineering Services	7,202	7,118	-1.2%
  Testing Services	16,513	16,726	1.3%
  Others	5,446	4,982	-8.5%
  Total IT services	109,442	110,145	0.6%
  Consulting, Package Implementation & Others	57,093	58,364	2.2%
  Products, Platforms and Solutions	9,135	9,431	3.2%
  Total Revenues	175,670	177,940	1.3%
  By new services and software
  New Services (Cloud, Analytics, API, IoT, Cyber Security)	16,513	17,616	6.7%
  New Software (Edge, NIA, Panaya, Skava)	2,811	3,025	7.6%
  By industry vertical
  Banking and Financial Services	47,431	46,798	-1.3%
  Insurance	11,243	12,100	7.6%
  Manufacturing & Hi Tech	38,647	38,791	0.4%
  Retail & CPG	24,242	25,090	3.5%
  Telecom	18,270	18,684	2.3%
  Energy & Utilities	9,662	10,321	6.8%
  Transportation & Logistics	3,513	3,737	6.4%
  Lifesciences & Healthcare	11,946	11,566	-3.2%
  Others	10,716	10,854	1.3%
  By geography
  North America	106,456	107,476	1.0%
  Europe	40,755	43,417	6.5%
  India	5,797	5,338	-7.9%
  Rest of world	22,661	21,709	-4.2%