Margins, financial services biz big positives from Infosys: Pro

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Infosys

reported a 2.8 percent profit growth sequentially at Rs 3,708 crore while its revenue fell 0.2 percent to Rs 17,273 crore in the third quarter of FY17. Dollar revenue for the company declined 1.4 percent to USD 2,531 crore compared to previous quarter.

Infosys has revised its full year revenue guidance to 8.4-8.8 percent from 8-9 percent in constant currency.

Girish Pai, Head of Research at Nirmal Bang Institutional Equities, said that the guidance revision is a definite positive in the short-term. However, he is more worried for medium and long-term growth on both structural and cyclical parameters.

Margins, too, will be a big worry, he said, adding that changes in the H1B visa hike could lead to 100-350 basis points margin cut for the IT companies.

The company’s operating margin in Q3 exceeded expectations at 25.1 percent, up 0.2 percent. Net margin expanded 0.6 percent to 21.5 percent on sequential basis.

Moshe Katri, MD of Wedbush Securities said that margins and performance in the financial services are the big positives from Infosys.

Infosys tightening its guidance for the ongoing fiscal was on expected lines. Moshe is neutral on the company.