Infosys stocks rallying on bourses as Q3 results are better-than- expected

Since the Q3 results of Infosys are better- than-expected, though both its net profit and earning declined in the quarter, stocks of the second-largest IT company in the country rallied on the stock markets. Contrary to expectations, the scrips of the Bengaluru-based IT major opened 6 per cent higher, their biggest single-day rally since July 20. At 11.25 am, the share is being sold at Rs1605.30, up 7.42 per cent on NSE. The share oped the trading at Rs1562, 6 per cent above the previosu closing..

Results

Infosys, the second largest IT company in the country suffered a 7.3 per cent year-on-year (YoY) fall in net profit at Rs 6,106 crore in the third quarter of FY24. This is below the market estimation of Rs 6,244 crore.

The company’s bottomline declined by 1.7 per cent on a sequential basis , said the Bengaluru-based IT major in a regulatory filing on January 11.

Q3 is a typically weak quarter for IT companies as adverse impact from furloughs and fewer working days plays foul.

Infosys also scaled down its revenue growth forecast for the full year to 1.5-2 percent . This comes after it slashed the guidance last quarter to 1-2.5 percent from 1-3.5 percent

However, the consolidated revenue of the company for the quarter moved up 1.3 per cent at Rs 38,821 crore YoY. Revenues for the quarter were marginally above analyst estimates of Rs 38,630 crore.

The EBIT margin or the operating margin was down 70 bps to 20.5 percent, which was affected by furloughs and salary hikes. The company retained its operating margin guidance of 20-22 percent.

“Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation," Salil Parek