Infy‘s results were today, and we present them in charts.
Revenues Up, Profits Up (Finally)
The rupee has also gone from Rs. 61 last year to Rs. 65 this year which is a 6% tailwind for them. They say they’ve hedged a fair amount so this could really be volume growth.
The revenue growth is indeed impressive. They have a Earnings Growth of 10% for the quarter, and about 18% on a twelve month basis.
PE of 18, Just as EPS growth Moves To 18%
“Fairly valued” one would say.
Adds Enough Headcount, Keeps Utilization Up
Big Hiring has happened, head count growth
They will grow as much as they have employees for the most part.
Attempt to Increase Margins Through Efficiency: Move to Fixed Bid
More and more projects are becoming fixed-bid.
This is good because it won’t need headcount growth, and can be done by leveraging expertise or productizing parts of their solutions.
And they seem to be increasing profits per employee too, after it’s slid a bit:
Concerns: CFO Quits, Weak Guidance
The Infy CFO, Rajiv Bansal has quit. He hasn’t even cited “personal reasons”. He’s just quit. This is a little scary and perhaps the reason the stock is down about 3%.
The guidance has been for 6-8% dollar level growth. This is not every exciting and points to a weak second half of the year.
My view: I would move on. Infy’s probably coming back a little but with low guidance and growth that is not very attractive, I’d rather buy other companies. Pharma looks more exciting.
Disclosure: No positions in Infy.
