Infosys has sprung a pleasant surprise for investors with its September quarter numbers, after being battered in the preceding quarter. During the quarter, a host of uncertainties sprang up for the tech major, ranging from US recession fears and worries about the fate of the dollar to the debt downgrade to the turmoil in Europe. But the actual numbers suggest that none of the concerns have played out.

Good growth across verticals, impressive large-client additions, steady volume(person-months billed) growth and firm pricing have been the key highlights for the quarter. Of course, the rupee depreciation over the past month has also played its part in giving a leg-up to the numbers.

During the quarter, Infosys revenues grew by 8.2 per cent sequentially to Rs 8,099 crore, while net profit stood enhanced by 10.7 per cent to Rs 1,906 crore. This is despite lower ‘other income' as a result of an Rs 283 crore exchange loss on forward options and contracts. Tax payouts too increased 13.2 per cent to Rs 762 crore. The revenue growth in dollar terms was 4.5 per cent.

Volume growth of 4.5 percent is higher than the previous quarter's figures, with the added sweetener being a marginal increase in realizations. This puts to rest fears that Infosys would have to lower prices to attract clients.

Holistic growth

All the verticals have grown in the quarter for Infosys in the range of 3.5-5.5 per cent sequentially. While BFSI and Energy, Utilities, Communications & Services have grown at around 4.4 per cent, Retail & Life Sciences has once again led the growth at 5.5 per cent.

In terms of geographies, while the US expanded at a healthy 6.3 per cent, Europe witnessed marginal growth. The company has added 10 new clients in Europe suggesting that the pipeline continues to be reasonable.

In terms of the service-mix, while offerings such as applications development, testing and product engineering services grew by over 10 per cent, the higher-billed consulting and package implementation expanded by 2.4 per cent. This suggests that normal business IT services' spends continue to happen and importantly, there is no cutback or pullback in discretionary and higher value services as yet.

Infosys' top clients have grown at the company's rate. During the quarter, it has added a new entrant in the $300-million plus category and nine customers in various pockets in the $50-100 million range. Given these favourable factors and with an assumed exchange rate of Rs 48.98, Infosys looks well-placed to achieve an upgraded guidance of 21.8 per cent and 19.7 per cent growth in revenues and net profit, respectively.

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