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Company Report

Infosys

Infosys Technologies Limited has put up a better than expected result for the second quarter ended September 2002 with total revenues of Rs 897.10 crore (Rs 664.79 crore) up 35 per cent from the previous corresponding quarter while its total spending stood at Rs 671.33 crore (Rs 463.22 crore) up 45 per cent over the same period last year, leading to a 12 per cent rise in the net profits over the previous corresponding period.

Infosys has marginally revised its growth estimates for fiscal 2003 now expecting revenues to touch Rs 3,433 crore to Rs 3,467 crore against its earlier guidance of Rs 3,108 crore and Rs 3,195 crore.

During the quarter, the company reported a total income from operations of Rs 879.57 crore (Rs 650.13 crore) up 35 per cent over the previous corresponding period.

At Rs 556.33 crore (Rs 391.21 crore) operational costs have gone up by 42 per cent over the previous corresponding period.

Margins have been squeezed with more pressure on the billing rates. Operating profit rose by 25 per cent over the previous corresponding period to Rs 323.24 crore (Rs 258.92 crore) while the OPM actually fell by 3 percentage points to 37 per cent from 40 per cent during the same period last year.

Other income moved up 20 per cent over the previous corresponding period to Rs 17.53 crore (Rs 14.66 crore).

After having provided for Rs 45 crore (Rs 33 crore) in taxes Infosys recorded a net profit of Rs 225.77 crore (Rs 201.57 crore) up 12 per cent from the year ago period.

Income from operations have been picking over the last two quarters but margins have not gone up. Operating profit was up 18 per cent sequentially. OPM has nudged up by a percentage point against the 36 per cent it reported during the June quarter.

However, Infosys expects an EPS in the range of Rs 148 to Rs 152 per share (annualised). The net profits based on the EPS expectation works out to a healthy Rs 251 crore an 11 per cent sequential growth. For the March quarter, the expected PAT works out to over Rs 265 crore 6 per cent rise sequentially on a 2 per cent sequential rise in turnover.

The stock currently trading at around Rs 3,700 discounting its March quarter annualised EPS of Rs 145 by 26 times. The stock has about 10 per cent room for rise.

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