Infosys disappoints again in Q1...Cuts FY13 guidance

Infosys Ltd. has posted financial results for the first quarter ended 30th June, 2012. Its consolidated net profit stood at Rs. 22.89bn as compared to Rs. 23.16bn for the previous quarter. Q1 FY13 net profit is up 32.9% YoY. Consolidated revenues were at Rs. 96.16bn for the quarter ended June 30, 2012 versus Rs. 88.52bn in the January to March quarter. Q1 FY13 revenues are up 28.5% YoY. For Q1 FY13, revenues were expected to be in the range of Rs. 90.11bn and Rs. 91bn; a YoY growth of 20.4% to 21.6%. Earnings Per Share (EPS) was Rs. 40.06 for the quarter ended June 30, 2012; a YoY growth was 32.9%. EPS were expected to be Rs. 36.89; a YoY growth of 22.4%. Infosys has reported dollar revenues of US$1,752mn for the fiscal first quarter of FY13. The Company's Earnings Per Share (EPS) in US Dollar terms stood at US$0.72. Q1 FY13 revenues were expected to be in the range of US$1,771mn and US$1,789mn; a YoY growth of 6.0% to 7.1%. Q1 FY13 Earnings per American Depositary Share (EPADS) were expected to be US$0.73; a YoY growth of 9.0%.

Other highlights:

• 51 clients were added during the quarter by Infosys and its subsidiaries
• Gross addition of 9,236 employees (net addition of 1,157) for the quarter by Infosys and its subsidiaries
• 1,51,151 employees as on June 30, 2012 for Infosys and its subsidiaries

"Our focus on Infosys 3.0 and building tomorrow’s enterprise coupled with disciplined execution will help us deliver high-quality growth, despite challenges seen in the global economic situation resulting in slower IT spends by large corporations," said S. D. Shibulal, CEO and Managing Director.

Consulting and Systems Integration

A processed and packaged goods food company has engaged us in a SAP advanced planning optimizer (APO) project to support its growth strategy by improving supply chain visibility, reducing cost and inventory, and increasing speed and agility to meet dynamic market demands. We are creating and implementing a roadmap for the online business for a retailer, designed to make it competitive in the rapidly growing e-commerce industry. We were selected by a European energy trading house to develop and implement a capability platform strategy, designed to manage a dynamic business environment, improve competitiveness and reduce time-to-market. We have been selected as the strategic partner to implement the Oracle Product Management suite for a Middle Eastern food control authority to automate processes leading to faster response time, predictability and cost control...Read More

Infosys cuts FY13 dollar revenue guidance

TCS Q1 net profit up 11.4% QoQ

Tata Consultancy Services (TCS) has reported Q1 FY13 net profit of Rs. 32.81bn, up 11.4% from the last quarter and 37.8% from the same quarter last year. The company has posted Q1 FY13 revenues of Rs. 148.69bn, up 12.1% from the last quarter and 37.7% from the year ago period. TCS has reported volume growth of 5.3% in the reporting quarter compared to the last quarter. Operating profit at Rs. 40.90bn grew by 11.3% from the previous quarter and 44.7% from the same quarter a year earlier. The above numbers are as per IFRS in Indian Rupee terms. Earnings Per Share (EPS) for the first quarter of FY13 stood at Rs. 16.76. Operating profit margin for Q1 FY13 stood at 27.5%.

Commenting on the Q1 performance, Chief Executive Officer and Managing Director, N Chandrasekaran said: "We have seen strong, secular growth across all our service lines and industry segments driven by robust volumes from key markets like North America, Europe and UK. We have also absorbed impact of wage hikes and maintained our profitability in a volatile setting. He added: "Looking ahead, TCS continues to see good demand from global corporations as they successfully navigate an increasingly complex environment. Our investments in new technologies and platforms are bearing fruit with increasing market traction and we are confident of playing a pivotal role in our customers’ future business evolution."

S. Mahalingam, Chief Financial Officer and Executive Director, said: "Our ability to closely monitor and maintain our operating expenses to support higher revenues is helping us maintain healthy margins. This ensures that we are able to continuously make investments needed in technology, capabilities and infrastructure to fuel growth over the long-term." He added: "The unprecedented volatility among major currencies and the Indian rupee will continue to be a challenge in the short term and we are taking the steps to mitigate any risks arising from this scenario.

Growth in Q1 was very broad-based. Growth was seen across all industry segments led by Retail, Telecom and BFSI. There was balanced growth across IT and other service lines led by BPO, enterprise solutions & infrastructure services. Major markets grew smartly led by UK, USA and Europe grew alongside growth markets like Latin America.

Innovation and Intellectual Property:

As of June 30, 2012, the company has applied for 914 patents including 59 applied for during the quarter. Till date, the company has been granted 72 patents.

Human Resources:

The company continued to hire to support business growth. With campus trainees joining the company from the beginning of July-September quarter, lateral hiring accounted for 75% of total hiring in Q1. There was a total gross addition of 13,831 people (net addition of 4,962) taking the total employee strength of 243,545 on a consolidated basis. The utilization rate (excluding trainees) was at 81.3% and that including trainees was 72.3%. The attrition rate (LTM) was 12.0%...Read More

HDFC Bank Q1 net profit jumps 30% YoY

HDFC Bank has reported Q1 FY13 net profit of Rs. 14.17bn vs. Rs. 10.85bn recorded in the same quarter of last financial year. The Net Interest Income (NII) for the reporting quarter stood at R 34.84bn vs Rs. 28.48bn in the corresponding quarter a year earlier. Gross NPAs for Q1 FY13 stood at 0.97% vs. 1.02% in the preceding quarter. Other income for the reporting quarter stood at Rs. 15.30bn vs Rs. 11.20bn in the same quarter last year. The Capital Adequacy Ratio (CAR) for Q1 FY13 stood at 15.5% vs 16.5% in the previous three months.

Network

As of June 30, 2012, the Bank’s distribution network was at 2,564 branches and 9,709 ATMs in 1,416 cities as against 2,111 branches and 5,998 ATMs in 1,111 cities as of June 30, 2011.

Asset Quality

Asset quality remained healthy and stable with gross non-performing assets as on June 30, 2012, at 1.0% of gross advances, and net non-performing assets at 0.2% of net advances as of June 30, 2012. The Bank’s provisioning policies for specific loan loss provisions remained higher than regulatory requirements. The NPA coverage ratio based on specific provisions (not including write-offs, technical or otherwise) was at 81% as on June 30, 2012. Total restructured loans (including applications received and under process for restructuring) were at 0.3% of gross advances as of June 30, 2012. The Bank’s total balance sheet size increased by 25.9% from Rs. 285,942 crores as of June 30, 2011, to Rs. 360,001 crores as of June 30, 2012. Total net advances as of June 30, 2012, were Rs213,338 crores, an increase of 21.5% over June 30, 2011. The mix of loans between the retail and wholesale segments was 52:48 as on June 30, 2012, as against 54:46 as on March 31, 2012. Total deposits were at Rs257,531 crores, an increase of 22.0% over June 30, 2011. Savings deposits grew 18.4% to Rs. 76,674 crores and current deposits grew 7.4% to Rs41,682 crores. With the term deposits growth at 29.4%, the CASA ratio was at 46.0% of total deposits as at June 30, 2012.

HDFC Q1 net profit up 19% YoY

Housing Development Finance Corporation Ltd (HDFC Ltd) has posted results for the first quarter ended 30th June, 2012. Its net profit was stood at Rs10.01bn as compared to Rs8.44bn, a growth of 19%. HDFC Ltd. said that its Net Interest Income (NII) stood at Rs. 15.26bn in Q1 FY13 versus Rs. 12.86bn in the corresponding period of the last fiscal year.

TOTAL ASSETS

As at June 30, 2012, the total assets of HDFC stood at Rs1,74,676 crores as against Rs148,831 crores as at June 30, 2011 – an increase of 17%.

LENDING OPERATIONS

As at June 30, 2012, the loan book stood at Rs1,48,262 crores as against Rs. 1,24,168 crores as at June 30, 2011. Individual loans sold during the preceding 12 months amounted to Rs4,978 crores. The growth in the individual loan book, including loans sold is 29% (23% net of loans sold) whereas the non individual loan book grew by 14%. The growth in the total loan book inclusive of loans sold is 23% (19% net of loans sold). During the quarter ended June 30, 2012 the loan book grew by Rs. 7,387.74 crores of which Rs6,635.07 crores – representing 90% of the increase was on account of the increase in the individual loan book. For the quarter ended June 30, 2012, loan approvals grew by 17% and loan disbursements grew by 20% as compared to the corresponding quarter in the previous year.

Spread and Net Interest Margins

The spread on loans over the cost of borrowings for the quarter ended June 30, 2012 stood at 2.27%. Net Interest Margin for the quarter ended June 30, 2012 was 4%.

Investments

As at June 30, 2012, the unrealised gains on HDFC’s listed investments amounted to Rs27,001 crores (previous year ` 23,206 crores). This excludes the appreciation in the value of unlisted investments...Read More

India's industrial output grows by 2.4% in May

India's industrial production edged higher in May after contracting in the previous month, as output in Manufacturing and Mining sectors picked up pace while Electricity growth remained solid. The combined output of Factories, Mines and Power Utilities, as measured by the index of industrial production (IIP), grew by 2.4% in May 2012 as against a revised (-)0.9% reading in April 2012, the Commerce Ministry said.

The IIP had expanded by 6.2% in May 2011. The cumulative growth rate in IIP for the period April-May 2012-13 stands at 0.8% over the corresponding period of the previous year. The three main constituents of the IIP are Mining, Manufacturing and Electricity. The monthly growth rates of these three sectors for May 2012 stood at (-)0.9%, 2.5% and 5.9% respectively. As per "use-based" classification there has been negative growth in Capital Goods (-7.7%) and positive growth has been achieved in Basic Goods (4.1%), Intermediate Goods (2.7%), Consumer Durables (9.3%) and Consumer Non-durables (0.1%). The IIP for May 2012 stands at 170.2 as against 164.7 in April 2012. It was at 166.2 in May 2011...Read More

Low probability of industrial recovery in short run: Fitch

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