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Bangalore-based Infosys surprised the Street with a 4.1% q-o-q rise in its net profit for the fourth quarter ended March 2014 at Rs 2,992 crore. On an annual basis, however, the IT major clocked in a 25% rise in quarterly net profit as it added new clients including Chinese-owned Swedish automaker Volvo Car Corp. The company had posted net profit of Rs 2,390 crore in the same period a year earlier.
Foreign institutional investors (FIIs) seem bullish on the Infosys with their stake in the country’s second largest software firm touching a record high of 42.10% in the January – March 2014 quarter. (Read Story: FIIs keep faith in Infy)
The results, which were announced before the markets opened for trade, got a thumbs-up from the market with the scrip gaining nearly 3% at open. It has, however, shaved-off some gains in late morning deals. (Track IT stocks here)
Analysts at Credit Suisse had pointed in a note earlier that they believed street expectation for Infosys' FY14 revenue growth guidance is between 6 – 9% (assuming guidance is given) – a number lower than 6% will be a negative surprise.
“For the March 2014 quarter, we expect a sequential revenue growth of 0.5% (USD terms). Management has indicated that revenue would come in at the low end of its guidance of -0.4% to +1.4% growth. We expect margins to increase 50 bps (basis points) quarter-on-quarter (q-o-q) as the company's cost-cutting measures continue to bear fruit,” they had said in a note earlier. (READ STORY: Will Infy's FY14 numbers surprise analysts?)
G Chokkalingam, founder, Equinomics Research & Advisory tells Puneet Wadhwa that though the results positively surprised the Street, the guidance looks conservative and does assume some amount of appreciation in rupee.
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