Infy surprises markets with Q3 numbers, stock gets a fresh lease of life

India's second largest software service firm Infosys Ltd. announced its nine month ending quarterly results on Thursday. It's performance in traditionally weak December quarter, beats the expectations and surprised the market. The company beats the revenue expectation for third consecutive quarter.

On financial front, the consolidated net revenue from operations of Infosys reached Rs 15902 crores in Q3FY16 compared to Rs 15635 crores in Q2FY16 an increase of 1.70 per cent quarter on quarter (QoQ). The operating profit stood at Rs 3959 crores this quarter compared to Rs 3993 crores in Q2FY16, a decrease of 0.85 per cent QoQ. The employee expenses of company increased by 2.57 per cent QoQ to Rs 8772 crores from Rs 8558 crores in Q2FY16. The net profit stood at Rs 3465 crores in Q3FY16 compared to Rs 3398 crores in Q2FY16, an increase of 1.97 per cent QoQ.

"Infosys confidence in innovation and adoption of Aikido services by clients helped company deliver encouraging results despite the traditional seasonality of quarter and additional headwinds, and will strengthen the execution of strategy towards consistent profitable growth," says Vishal Sikka, CEO and MD.

On a yearly basis the revenue from operations of company in Q3FY16 increased by 15.3 per cent YoY from Rs 13796 crores in Q3FY15. The operating and net profit increased by 7.3 per cent and 6.6 per cent YoY. The net profit margin decreased to 21.78 per cent from 23.55 per cent in Q3FY15.

The nine month ending consolidated net revenue from operations increased by 15 per cent and reached Rs 45891 crores, compared to Rs 39908 crores during the same period last year. The operating profit stood at Rs 11400 crores, an increase of 9.79 per cent. The net profit for the same nine month period stood at Rs 9894 crores, compared to Rs 9232 crores, an increase of 7.17 per cent from same review period last year.

The revenue in USD terms increased by 0.6 per cent QoQ and 8.5 per cent YoY to USD 2407 million. The constant currency (CC) revenue growth stands at 1.1 per cent QoQ to USD 2418 million; and 12.5 per cent YoY to USD 2495 million. In Geographical segment North America which contributes to 62.5 per cent of revenue decreased by 0.6 per cent sequentially and 0.5 per cent in CC terms. Europe and India which combinedly contribute to 26 per cent, sequentially increased by 2.1 and 23.1 per cent respectively. In CC terms Europe and India increased by 3.9 per cent and 24.3 per cent.

Reacting to the stellar set of numbers, stock spiked up more than 4.50 per cent to Rs 1130 in early morning trade.

Infosys is engaged in consulting; technology; outsourcing; and next-generation services. Its segments are Financial Services and Insurance; Manufacturing; Energy and utilities; Communication and Services; Retail; Consumer packaged goods and Logistics; Life Sciences and Healthcare; and Growth Markets.