Views on Infosys 1QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking) on Infosys 1QFY2016 Results:

"Infosys announced its 1QFY2016 results today, which came well ahead of expectations on the sales front. The company posted a 4.5% qoq growth V/s 4.0% sequential growth in USD revenues to US$ 2,256mn V/s US$ 2,246mn expected. The Constant currency growth (CC) was around 4.4% during the period, mainly driven by a 5.4% volume growth (highest in 19 quarters). In terms of client additions, largest client crossed US$ 300mn; added 2 clients in US$ 200mn bucket. Also, it added 6 large deals in 1QFY2016 with TCV of US$ 688mn. Overall the company added 79 gross clients during the period.

In rupee terms, the revenues came in at INR 14,354cr V/s INR 14,253cr expected, up 7.0% qoq. EBITDA margins came in below expectation at 26.2% V/s 27.7% expected, a qoq dip of 152bps. While the utilization improved to 75.1% (including trainee) V/s 72.8% in 4QFY2015, higher onsite share along with wage hikes lead the margin dip in the quarter. Consequently, the PAT came in at INR 3,030cr V/s INR 3,227cr expected a dip of 2.2% qoq. On the positive side, quarterly annualized attrition for the company (consolidated) came in at 19.2% in 1QFY2016 compared to 18.3% in 4QFY2015.

In terms of guidance, for FY2016 revenue guidance has been retained at 10%-12% in constant currency; increased to 7.2%-9.2% in USD terms. We maintain our BUY rating on the stock with a target price of INR 1,315."

Shares of INFOSYS LTD. was last trading in BSE at Rs.1102.6 as compared to the previous close of Rs. 1112.65. The total number of shares traded during the day was 304363 in over 11970 trades.

The stock hit an intraday high of Rs. 1111.45 and intraday low of 1075.75. The net turnover during the day was Rs. 334846935.

Source : Equity Bulls

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