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Infosys first quarter operating margins and net profit were ahead of expectations, while the topline came in line with estimates, according to MSFL Research Institutional Business Group.
The company’s dollar revenues grew 2 per cent on a quarter-on-quarter basis to $2133 million (estimate 2.1 per cent), led by healthy volume growth of 2.9 per cent.
In rupee terms, revenues came in at Rs 12,770 crore, down 0.8 per cent on a quarter-on-quarter basis. Infosys’ EBIT margin declined by just 35 basis points (QoQ) to 25.1 per cent compared with the expectation of about 210 bps sequential decline, MSFL said.
“This is commendable given the fact that company was facing margin headwinds of wage hike, visa costs increase and rupee appreciation. On a broader level, the company has been able to mitigate that by utilisation improvement as well as decline in employee expenses,” it added.
Net profit came in at Rs 2,886 crore, higher than the estimates on account of operational gains.
“Infosys results were largely in line with our estimates. The surprise during the quarter was less than expected contraction in EBIT margin despite wage hike and visa-related cost. This illustrates that the cost optimisation initiatives taken up earlier have started yielding results,” said Hitesh Shah, Director Research at IDFC Securities.
“Given the stable global environment, we are of the view that Infosys FY15 guidance is a bit on the conservative side; hence we expect the upward revision in the guidance going ahead,” Shah added.
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