 "Infosys has raised the bar of expectations from the other IT companies: Dipen Shah")
In conversation with Jinsy Mathew, Dipen Shah, senior vice president and head of private client group research, Kotak Securities shares his first take on the Infy numbers
What is your reaction to the Infosys numbers?
The initial reaction is positive, as revenue and margins in the recently concluded quarter were higher-than-expected. Also, Infosys has improved efficiency levels despite adding a higher number of employees, which we consider as a positive. The company has maintained its guidance and that was along expected lines.
Though the guidance is lower than industry, this is something which was already known as the company is in restructuring mode. We expect the growth rate to be relatively better going ahead. We will be looking forward to their strategic vision for the company.
Is the current set of numbers a margin expansion story or a demand improvement story?
It’s a mix of both. There is margin improvement but in the future going ahead we believe there should also be a revenue growth expansion which should help the company.
Has the result raised the bar of expectations from the other companies in this sector?
Yes, without a doubt. It’s a good start from Infosys and others will be expected to continue the good run.
If one were to extrapolate this performance, do you see the gap between Infosys and TCS coming down in the near future?
If the management is able to improve the growth rate in the next year then the gap is bound to reduce. We will have to wait and see how the growth story pans out for Infosys.
IT stocks have gained in today’s trade across the large and midcaps. Would you be a buyer in midcaps or large caps now?
We are stock specific. We like some of the large and mid – cap stories.
What is your reaction to the Infosys numbers?
The initial reaction is positive, as revenue and margins in the recently concluded quarter were higher-than-expected. Also, Infosys has improved efficiency levels despite adding a higher number of employees, which we consider as a positive. The company has maintained its guidance and that was along expected lines.
Also Read
FY15 dollar revenue guidance has been maintained between 7-9%, which is much below the revue guidance of the industry. How do you interpret this announcement?
Though the guidance is lower than industry, this is something which was already known as the company is in restructuring mode. We expect the growth rate to be relatively better going ahead. We will be looking forward to their strategic vision for the company.
Is the current set of numbers a margin expansion story or a demand improvement story?
It’s a mix of both. There is margin improvement but in the future going ahead we believe there should also be a revenue growth expansion which should help the company.
Has the result raised the bar of expectations from the other companies in this sector?
Yes, without a doubt. It’s a good start from Infosys and others will be expected to continue the good run.
If one were to extrapolate this performance, do you see the gap between Infosys and TCS coming down in the near future?
If the management is able to improve the growth rate in the next year then the gap is bound to reduce. We will have to wait and see how the growth story pans out for Infosys.
IT stocks have gained in today’s trade across the large and midcaps. Would you be a buyer in midcaps or large caps now?
We are stock specific. We like some of the large and mid – cap stories.
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%