Infosys PAT beats street estimates at Rs 3,250 crore

Fri, Jan 09, 2015 | 06:06 PM IST

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Infosys declared an interim divident of Rs.30 per share

The Bangalore-based major IT company Infosys announced better-than-expected revenue and profit growth of 28.6% for the July-September quarter and cheered investors with a generous dividend and bonus.


Infosys Revenue grew by 4.5%.

  • Revenue during the quarter grew by 4.5 percent quarter-on-quarter (up 2.9 percent Y-o-Y) to Rs 13,342 crore.
  • Dollar revenue climbed 3.1 percent sequentially (up 6.5 percent on yearly basis) to USD 2,201 million in the quarter gone by (in constant currency revenue growth was 3.9 percent Q-o-Q and 6.3 percent Y-o-Y) driven by volume growth. Infosys has maintained its full year (FY15) dollar revenue guidance at 7-9 percent.
  • Revenue from North America territory grew 3.1 percent sequentially and 3.2 percent in constant currency and Europe revenue growth stood at 4.2 percent (Q-o-Q) and 6.5 percent in constant currency. Rest of world growth was 2.8 percent Q-o-Q and 4.2 percent in constant currency. However, India revenue declined by 5.1 percent on quarter-on-quarter basis and 4 percent in constant currency.
  • Volumes increased 3 percent Q-o-Q (2.9 percent in Q1) as offshore volumes increased 3.8 percent Q-o-Q (3.2 percent in Q1) while onsite volumes were up 1.1 percent in September quarter as against 2.2 percent in June quarter. Realisations increased 0.6 percent in constant-currency terms as onsite realisations were up 2.6 percent on sequential basis.

Infosys's profit.

  • Consolidated net profit rose to Rs 3,096 crore (28.6%) in the July-September quarter, 2014-15, from Rs 2,407 crore in the year-ago period.
  • "On several fronts, our efforts to bring in operational efficiencies yielded encouraging results during the quarter", said  UB Pravin Rao chief operating officer infosys. 

Infosys ( Dividend and bonus issue).

  • Infosys declared an interim dividend of Rs 30 a share (equivalent to interim dividend of USD 0.49 per ADS at the exchange rate of Rs 61), compared to Rs 20 a share in the previous year. The record date for payment of dividend is October 17, 2014.
  • In order to increase the liquidity of shares and to expand the retail shareholder base, Infosys announced a bonus issue of one equity share for every equity share held. 
  • The same bonus issue is also applicable to ADR shareholders, who will get one American Depositary Share (ADS) for every ADS held as on a record date to be determined.

State Bank of India

The country's largest bank State Bank of India has cut the deposit rates for 1-3 years to 8.75 percent from 9 percent, while for the period of 180-210 days, it has hiked the rates to 7.25 percent from 7 percent.
State Bank of India has revised interest rates on retail term deposits below Rs 1 crore.

state bank of india

SBI Chairman said the reason for a revision in rates is based on the availability of liquidity, while the credit demand has been low. “We have lot of liquidity in the 1-3 years band, thus we thought it right to cut the rates at that end. Also given the fact that inflation trajectory seems to be in the right direction, we will still be giving a real rate of return to out investors/depositors,” she said, adding that the bank will keep reviewing other rates as well.

The company's trailing 12-month (TTM) EPS was at Rs 147.33 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 17.39. The latest book value of the company is Rs 1584.34 per share. At current value, the price-to-book value of the company is 1.62.

KK Jalan, chief of Employees' Provident Fund Organisation

KK Jalan, chief of Employees' Provident Fund Organisation (EPFO) says it has "no option" but to change its rules and put money into riskier investments by buying stocks for the first time to seek higher returns. To get better returns, the fund with about $125 billion in assets needs to diversify investments, the bulk of which are in government debt.

Employees' Provident Fund Organisation (EPFO), world's ninth largest by assets, may change rules and buy stocks for the first time.

  • It invests about 5 per cent of its assets in AAA-rated corporate debt and a quarter in paper issued by state-run companies.
  • EPFO, funded by payroll contributions, holds 69 per cent of its assets in its provident fund. Another 29 per cent is invested in its $33 billion pension fund and the rest in a life insurance fund.
  • The fund now invests nearly 70 per cent of its annual accruals of about Rs 70000 crore ($11.5 billion) in central and state government bonds, through the State Bank of India , ICICI Securities, HSBC and Reliance Capital as its portfolio managers.

Sensex above closes above 27000

The Sensex rose 151.84 points to 27019.39, It touched all-time high of 27,082.85 and a low of 26,886.22 in trade.
Nifty climbed 55.35 points to 8083.05 after hitting intraday high of 27082.85 and 8101.95, respectively. The broader markets beat benchmarks with the BSE Midcap and Smallcap indices gaining nearly a percent.

The 30-share BSE Sensex closed above the 27000-mark for the first time while the 50-share NSE Nifty hit 8100 level intraday though it failed to hold the same level. The achievement of historical high was completely led by heavyweights like HDFC twins, ITC, Reliance Industries and Bharti Airtel, though selling in ICICI Bank and Tata Motors capped the somewhat upside.

Huge buying interest was seen in cement stocks on the back of higher growth in cement sector (at 16.5 percent in July versus 13.6 percent in June) among eight infrastructure sectors. Grasim Industries, ACC and Ambuja Cements rallied 3-4 percent.

Telecom stocks too were on buyers’ radar on reports that the Narendra Modi government has been planning a new super regulator for the communications sector. New regulator will be called as Communications Commission, which may replace Telecom Regulatory Authority of India (TRAI), said sources. Bharti Airtel was up 4.24 percent and Idea Cellular gained 3.4 percent
The current-account deficit - which mainly indicates that imports are in excess of exports - was 1.7% of gross domestic product at $7.8 billion in the fiscal first quarter.

It was 4.8% of GDP a year earlier, but just 0.2% in the January-March quarter. Strong dollar inflows ensured that India's balance of payment was in surplus in the April-June period.

Sensex & Nifty touched all time high today

Nifty hit a record high of 7918.55, before ending the day at 7897.50, up 23.25 points compared to previous day’s closing value. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices climbing over a percent each.

The S&P BSE Sensex finally closed 29.71 points or 0.11 per cent higher at 26420.67 to a fresh closing high. Following the momentum as much as 4 stocks rose to their fresh 52-week high on the BSE Sensex, which includes names like Cipla, M&M, Maruti Suzuki and Tata Motors.

“The Independence Day speech of the Prime Minister clearly tells us that the main focus is on creating infrastructure, making manufacturing easier. According to investor's, long term outlook is very positive. On the global front, Asian markets closed higher with the Nikkei rising 0.8 percent and European markets were trading at 0.4-1 percent following strong Wall Street closing last night (on easing tensions in Russia).
Back home, auto, capital goods, power and banks (select) stocks supported benchmark indices while FMCG and HDFC twins lost ground.

Auto stocks were leaders of the day.

BSE Auto Index gaining more than 2 percent. Tata Motors and Mahindra and Mahindra topped the buying list as well as ended at record closing high of Rs 518.75 and Rs 1374.55, up 3 percent and 3.7 percent, respectively. 

Two-wheeler makers Bajaj Auto and Hero Motocorp gained 2.5 percent and 1.3 percent, respectively. Capital goods majors BHEL (up 2.8 percent), and Larsen and Toubro (up 1.3 percent) too were on buyers’ radar. Shares of Sesa Sterlite advanced 1.5 percent after Goa government's announcement of resuming operations in the mining industry by the year-end. 
Top car maker Mauti Suzuki too saw all-time closing high, up 1.6 percent after Deutsche Bank maintains the stock as its top pick in the Indian auto sector with a target price of Rs 3000 a share.

Decline in gasoline prices in India by 4 percent from the beginning of FY15 is a positive development for entry-level car (Alto/WagonR) demand, said the brokerage. 

Among banking and financials;

State Bank of India, ICICI Bank and Axis Bank rose nearly a percent while HDFC Bank lost a percent. Housing finance company HDFC plunged 2.5 percent. TCS dropped 2 percent followed by ITC, Reliance Industries, Sun Pharma, Hindustan Unilever, Hindalco Industries, Infosys and Tata Steel with 0.2-0.8 percent. In the midcap space, Manappuram Finance surged 19 percent. Muthoot Finance, Shoppers Stop, Sadbhav Engineering and Jyothy Labs rallied 8-10 percent while Bhushan Steel, Prestige Estate, Engineers India, Pine Animation and ALSTOM India fell 2.5-5 percent. Oil retailers IOC, HPCL, BPCL surged 1.5-4 percent as the diesel under recovery dropped to record lows. 

As losses on retail diesel sales are now down to Rs 0.8 per litre, Goldman Sachs estimates it to fall to Rs 0.3 per litre after the price hike on September assuming oil prices and diesel cracks remain around current levels. Advancing shares outnumbered declining ones by a ratio of 1660 to 1285 shares on the Bombay Stock Exchange.

Generic agrochemicals company Meghmani Organics

Generic agrochemicals company Meghmani Organics reported strong Q1FY15 numbers.It reported revenue and EBITDA growth along with turnaround on net profit front. Net profit grew to Rs 7.8 crore v/s net loss of Rs 3.6 crore in the corresponding quarter last fiscal. Its closing price is Rs 17.72 in previous session.

Top line grew 22 per cent to Rs 312.7 crore, Year-on-Year (YoY) and EBITDA went up 20 per cent to Rs 49.9 crore, YoY on account of higher revenue growth, partially offset by rise in material cost.

According to the management, the company is seeing a business turnaround due to capex investment of Rs 130 crore. It is focussing on branded business in agro chemicals space and is looking to expand it in overseas & domestic markets. It has set a target of Rs 600 crore for the agro chemicals segment.

The company is expecting capacity utilisation to go up to 80 per cent from 60-65 per cent currently. It is expecting a topline of Rs 1,550 crore & EBITDA of Rs 250 crore for FY15. It sees PAT to be around Rs 55 crore in the same period.

"Meghmani stock has been trading at lower 1-year forward EV/EBITDA multiple of ~3.9x. With revival in business cycle, we have assigned 5.9x EV/EBITDA multiple (21 per cent discount to global peers) to arrive at FY16E based price target of Rs 34/share," the brokerage said.