Skip to main content

Infosys post Q4 earnings and FY18 guidance: What Analysis Says About?

The IT major on Thursday reported a consolidated profit at Rs 3,603 crore for the January-March quarter, de-growth of 2.8 percent from Rs 3,708 crore in previous quarter.



Infosys on Thursday reported a consolidated profit at Rs 3,603 crore for the January-March quarter, de-growth of 2.8 percent from Rs 3,708 crore in previous quarter. Revenue also fell 0.88 percent to Rs 17,120 crore on sequential basis.

The earnings, barring bottomline, missed analysts' expectations. Even its FY18 guidance was lower than estimates, but the announcement of Rs 13,000-crore payout through dividend or share buyback during the year and fall in attrition rate minimised losses in the share price. The stock fell 2.88 percent intraday.

"Unanticipated execution challenges and distractions in a seasonally soft quarter affected our overall performance," Vishal Sikka, CEO said.

Here's what analysts are talking about the company's results.

Citi said that the company’s Q4 results were marginally lower than estimates. It saw Q4 realisation decline of over 1 percent quarter on quarter in constant currency terms. Meanwhile, the FY18 EBIT margin at 23-25 percent is lower against the consensus of over 25 percent. The fourth quarter’s constant currency revenue was flattish quarter on quarter.

Morgan Stanley

Morgan Stanley said that the revenue was below its estimates. The guidance too turned out to be below its base case scenario. It implies a deceleration based on constant currency revenue growth as well as a growth of 2.1-2.9 percent QoQ over the next four quarters.

Motilal Oswal

Motilal Oswal believes that the FY18 constant currency guidance of 6.5-8.5 percent was slightly below its expectation of 7-9 percent. This marginally lower guidance seems an adjustment for Q4 revenue miss. The CC guidance implies a compounded quarterly growth rate (CQGR). On the payout policy, it feels that the act is only a terminology change.

Kotak Institutional Equities

Kotak Institutional Equities has an add recommendation for the stock. The research firm believes that key metrics were better than the headline numbers and that an increase in payouts was a positive. Overall, the business is moving in the right direction, but with interruptions. But the new deal signings were weak and needs close monitoring.

The company’s constant currency guidance is below the estimate of 0.9 percent. its FY18 revenue growth guidance implies CQGR Of around 2.2-2.8 percent over Q1-Q4FY18. It also expects 4-6% cut in FY2018-19 earnings estimates.

Labels:

Comments

Post a Comment

Popular posts from this blog

SBI Life gets ready for a big IPO this year, may raise Rs 8500-9000 cr

Once listed, this would be the second life insurer after ICICI Prudential Life Insurance to be listed on the stock exchanges. SBI Life Insurance, which has filed the draft red herring prospectus (DRHP) with Securities and Exchange Board of India (Sebi), is likely to bring out the largest initial public offering (IPO) in the insurance space. Sources said that the insurer could raise as much as Rs 8500-9000 crore from the IPO. Once listed, this would be the second life insurer after ICICI Pre dential Life Insurance to be listed on the stock exchanges. This includes an initial public offer of up to 120 million equity shares of face value of Rs 10 each through an offer for sale by State Bank of India and BNP Paribas Cardif where each will be selling up to 80 million equity shares and up to 40 million equity shares, respectively. Further, it also includes a reservation of up to 2 million equity shares (constituting up to 0.2 percent of the post-offer paid-up share capital) for p...
Post a Comment
Read more

Nifty likely to close above 10,000 in July series; 5 stocks which can give up to 14% return

There has been aggressive put writing in near strikes with 9900 strike holds the maximum put open interest indicating strong support zone. The Nifty is moving up and has been making new highs on regular basis with a decent addition in open interest (OI) which indicates the strength in the current trend. The Option writers were active last week as we have seen Put writing in 9900, 9800, 9700 strikes and unwinding in calls. The foreign institutional investors (FII’s) options data also indicates fresh buying in index calls (9900, 10000 strikes). Moreover, from derivative data, it is quite possible that Nifty may expire above 10,000 levels in the current series. As in the recent past, we have seen aggressive put writing in near strikes with 9900 strike holds the maximum put open interest indicating strong support zone. On Tuesday, Call writers were unwinding call short position which once again indicates the possibility of upside before expiry. On the technical front, 9920-9...
Post a Comment
Read more

CDSL issue shows IPOs riding market euphoria; tread carefully

A strong equity market performance is generally followed by a flurry of initial public offerings (IPOs). Euphoria grips the Street and IPOs – whether reasonably priced or not— get through with ease.  Conversely, primary market frenzy is often seen as harbinger of market peaking. This trend is playing on Dalal Street these days. But retail investors who ignore valuations of IPO in this euphoria often end up getting the wrong end of the stick.  Analyst warn that investor who wish to hold new papers on quality parameters should pay heed to valuations. “Many a times, companies with very high pricing also attract good subscriptions. Remember the Reliance PowerBSE -1.35 % issue in 2008? It did very well, but we all know what happened next. One should always look at valuations before putting money in an IPO. If you find an IPO more than fairly priced or aggressively priced, ignore it and look for opportunities in the secondary market instead. Some of the recent IPOs such as...
Post a Comment
Read more