The Hindu Business Line : The Infy show: Analysts’ view

Mumbai, Oct. 11 Even as Infosys’ quarterly results failed to impress the bourses, the investment community appeared to be satisfied with the company’s numbers

Most of the analysts believed that the net profit growth was in line with expectations, but the earnings revision was not as aggressive as expected.

EBITDA margins expanded by a strong 254 basis points, aided by lower salary and visa costs and a higher offshore proportion of revenues, said Mr Harit Shah, IT Analyst, Angel Broking.

“However, due to lower other income on account of lower forex gains, the company’s bottomline for the quarter grew at 7 per cent quarter on quarter (excluding extraordinary and one-time items),” he said. Some analysts also pointed out that a volume growth of 7.7 per cent sequentially was lower than expected. “The low volume growth can be attributed to the flattish growth witnessed in the top 10 outsourcing accounts of Infosys,” said Mr Gaurav Dua, IT Analyst, Sharekhan Securities.

Net addition of employees in the second quarter (at 4,530), was again lower than expected. In spite of the appreciating rupee, Infosys has been able to maintain margins, which is a good sign for future quarters if the rupee continues to trade in the 39-40 range.

“The overall results and operational results were better than expected. The company managed to handle the rupee pressure quite well,” said Mr Sandeep Shenoy, Strategist at Mumbai-based PINC Research.