Infosys Q3 Results Review - Steady Performance; Well Placed To Manage Near Term Uncertainty: Yes Securities

Yes Securities Report

Infosys Ltd. reported mixed financial performance for the quarter. While, the revenue growth was above estimate, Ebit margin came in below expectation.

Infosys' reported constant currency growth of 2.4% QoQ, led by manufacturing (up 36.8% YoY in constant currency terms) and energy and utilities (up 25.9% YoY in CC terms).

The Indian rupee reported growth of 4.9% QoQ was supported by depreciation of Rs by 2.9% QoQ versus U.S. dollar.

Ebit margin remained flat QoQ at 21.5% There was some moderation in employee attrition as last twelve months attrition was down 280 bps QoQ to 24.3%.

The multiyear tech adoption cycle broadly remains intact led by adoption of cloud and data analytics. However, the clients have become cautious regarding the evolving macroeconomic situation especially in Europe and there are signs of slowdown in discretionary spending in sectors such as hitech, retail, telecom, etc. and can lead to near term moderation in revenue growth.

Employee attrition has started moderating and should support operating margin going ahead.

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