Infosys beats market expectations; ADRs gain 8.4% on Friday

Infosys' March quarter earnings beat analysts' expectations with consolidated net profit rising 3.8 per cent to Rs 3,597 crore against Rs 3,465 crore in the sequential quarter ended September 2015. The company reported bottomline of Rs 3,097 crore in the corresponding quarter a year ago.

Sales of the company jumped 4.1 per cent quarter on quarter (QoQ) and 23.4 per cent year-on-year (YoY) to Rs 16,550 crore. In dollar terms, revenue in Q4 grew 1.6 per cent to USD 2,446 million and 1.9 per cent in constant currency compared to preceding quarter. Operating profit grew 4.3 per cent on a QoQ basis to USD 625 million for the quarter ended March 31, 2016 and 12.6 per cent on YoY basis.

Regions-wise, North America business grew 0.5 per cent on sequential basis (0.6 percent in constant currency), Europe 2.4 percent (3.6 percent in CC), India 9.1 percent (11.1 percent in CC) and Rest Of the World 4 percent (3.2 percent in CC). Financial services & insurance business declined by 0.3 percent sequentially but grew by 0.2 percent in CC. Manufacturing and hi-tech business registered a 1% sequential growth and 0.8 % in CC.

In the verticals, growth was led by telecom (9.2 per cent), retail (3.7 per cent) and energy (3.6 per cent QoQ).

For the year FY16, the company's consolidated net profit grew by 9.42 per cent of Rs 13,491 crore and revenue reported growth of 17.11 per cent at Rs 62,441 crore.

For FY17, the company has given revenue guidance at 11.5-13.5 per cent growth in constant currency and 11.8-13.8 per cent in USD terms at March 31, 2016 exchange rates. It expects to maintain FY17 EBIT margin within its target band of 24-26 per cent.

On Friday, Infosys' ADRs ended higher by 8.4 per cent or USD 1.55 at USD 20. Therefore on Monday it will open higher, tracking gains in its ADR.