Infosys reported in-line set of numbers for Q3FY18 on revenue and EBITDA margin fronts. Constant currency (cc) revenue grew by 0.8% qoq and US revenue came in at USD2,755mn. Revenue in rupee terms grew by 1.3% qoq to Rs17,794cr, which is in-line with consensus estimate of Rs17,862cr. EBITDA stood at Rs4,817cr, up 2.4% qoq against consensus estimate of Rs4,741cr, EBITDA margin inched up by 30bps qoq to 27.1%. PAT increased by 37.7% qoq to Rs5,129cr on tax reversal of Rs1,432cr post Advance Pricing Agreement (APA) with US IRS. Adj. for the tax reversal, PAT grew to Rs3,849cr, which is higher than consensus estimate of Rs3,591cr.
• Revenue guidance maintained at 5.5-6.5% cc for FY18E. Mr. Parikh (CEO) said that they will lay out strategic priorities after April. The first priority is to connect with people and clients.
• BFSI remained soft at 0.1% qoq USD due to muted BFS spends, but insurance was strong and grew 7.3% qoq USD. BFSI performance was better than that of TCS, which de-grew by 1.7% qoq.
• BFSI impacted by furloughs, slight budget cuts and slow ramp up owing to transition in deal wins. Management is confident about BFSI on better offering and spends returning in CY18. Five out of the eight large deal wins in the quarter were in BFSI.
• Retail and CPG returned to growth after a soft Q2 and grew 3.2% qoq USD.
• Energy and Utilities grew strongly for a third successive quarter by 6.5%.
• Telecom growth moderated to 2% qoq and Manufacturing also remained largely flat at 0.1% qoq USD.
• North America continued to be subdued at 0.7% qoq USD while Europe once again saw robust growth at 6.2% USD qoq.
• Client addition remained healthy. One client win in USD100mn bucket, three in USD75mn bucker and one in USD50mn bucket.
• EBIT margins were in-line on broad based improvement in operational efficiency parameters including utilization (84.9% - at an all-time high) and improved on-site mix (at 11 quarter low). Has retained full year margin guidance of 23-25%.
Infosys Ltd ended at Rs. 1,078.40, up by 2.8 points or 0.26% from its previous closing of Rs. 1,075.60 on the BSE.
The scrip opened at Rs. 1,089 and touched a high and low of Rs. 1,089 and Rs. 1,069.55 respectively. A total of 92,93,085(NSE+BSE) shares were traded on the counter. The stock traded below its 50 DMA.
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