In what was expected to be a robust quarter, Infosys Technologies disappointed the markets with just a mild growth in its financials for the second successive quarter. Key segments of operation too showed a decline, adding to the discomfiture.

In the March quarter, the company saw its revenues increase by two per cent sequentially to Rs 7,250 crore, while net profits grew by 2.1 per cent to Rs 1,818 crore. Coming on the back of similar numbers in the December quarter, it comes as a major disappointment. This was compounded by the company's lukewarm guidance for FY 12and two senior management personnel choosing to resign from the company.

The fact that profit numbers include a larger-than-usual Rs 415 crore in other income (mainly interest income from deposits, thanks to higher yields) added to the negativity.

Infosys saw volumes (person-months billed) decline by 1.4 per cent sequentially, a first in the past 3-4 quarters, though realisations did increase by about 2.4 per cent on the back of improved pricing, especially from new contracts.

The lower volumes came on the back of reduced rate of utilisation at 75.2 per cent, much lower than the previous quarter (80 per cent plus).

The company's key segments too have witnessed strain with revenues from North America falling marginally during the quarter. Contribution from the BFSI vertical too dwindled marginally, mainly due to a tepid quarter for its insurance segment. The telecom vertical continued to witness disturbing signals with a four per cent fall in revenues in that segment. However, the European geography, and also the manufacturing and retail verticals grew at a healthy clip to make up for the underperformance of the other segments.

For Infosys, the continuing traction in its software products business should help support margins. Its low-margin application services line has grown at a healthy clip. Large-client addition too continues to be reasonable with seven new accounts added in the $60-90 million category.

Contribution from its top clients continues to be stable at around 15 per cent.

Infosys' guidance for FY12 too came in much lower at 15.4-17.3 per cent growth in revenues and just 5.5-7.3 per cent growth in earnings. This, in light of firmed up client budgets and increased spends, apart from being conservative, also probably suggests chasing margins ahead of growth.

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