Info-tech

Broad-based growth across metrics signals turnaround in Infosys

K. Venkatasubramanian BL Research Bureau | Updated on March 12, 2018 Published on January 11, 2013

bl12_Rev_by_Ind.eps

bl12_Rev_by_geo.eps

Has Infosys finally broken the shackles of being an underperformer and turned the corner? If the company’s December quarter numbers are anything to go by, it certainly is a good start.

Increase in volumes (person months billed), higher realisations, growth across verticals and healthy large-client additions in the quarter meant that Infosys exceeded market expectations handsomely. Significant rise in its package implementation and consulting practice’s contribution to revenues meant that the company has also been able to tap into the discretionary spends of clients as well. It was of course aided in the process by Lodestone, the company it acquired a few months back.

During the quarter, while revenues rose by 6.3 per cent sequentially in dollar terms (its best in 4-5 quarters), net profit was largely unchanged even as the company increased its wages for offshore employees.

Key parameters robust

Infosys witnessed a sequential increase of 2 per cent in volumes, while pricing was up 1.8 per cent. The increase in realisations has come about after two successive quarters of pricing declines.

Revenues from three of its key verticals – BFSI, Retail & Life Sciences and Energy, Utilities & Communications, grew at 6.4-7.8 per cent, indicating broad-based demand. Manufacturing too grew, though at a slower pace.

The company added a client under $100 million category, while adding 7 customers in the range of $60-$90 million.

Fixed price contracts, which ensure better realisations than time and material contracts, increased contribution to revenues.

Another key positive in the quarter has been a 16.6 per cent increase in revenues from the European geography, with Lodestone providing the necessary impetus.

Consulting and package implementation, an offering that commands higher billing rates and is more likely to include discretionary spends has grown at a pace faster than the company’s revenue rate. This could be indicative of Infosys being on the right track to tap increased spends of clients. Infosys has finally matched some of its peers such as TCS and HCL Technologies in growth across parameters and key financials. The fact that the company managed to beat market expectations with no specific one-offs aiding its results lends confidence. That said, sustainability is the key.

Published on January 11, 2013

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
null
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.