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Result Update: Infosys Technologies: Infosys' 3QFY11 results : Volume growth at 3.1% QoQ was below expectations. However, a 1.6% rise in average realizations were surprising. Margins came in line with market expectations.The guidance for a marginal growth in USD revenues in 4Q is predicated on the short term concerns about the global macro scene. Infosys management has likely taken a conservative view of the short term challenges. On the other hand, management did indicate that CY11 may be a normal year for the industry with growth in mid - high teens. One can expect Infosys to grow at above-industry rates in FY12E. Infosys has raised the revenue and EPS growth guidance for FY11, marginally. FY12E EPS stands at Rs.149 (INR - USD exchange rate at 45) and accordingly the price target works out to Rs.3620. Infosys is benefiting from the positive change in client sentiments and the presence of various margin levers. Infosys' long term strategy is geared towards providing ser...

Result Update: Infotech Enterprises • Infotech’s results for 2QFY10 were inline with expectations on the revenue line and operational front. Revenues grew 2.1% QoQ; EBITDA de-grew marginally QoQ as margins expectedly moderated 80bps QoQ. Business volumes were flattish QoQ; cross currency benefits impacted revenues positively by 2.1%, and contributed to all of the growth seen in the quarter. • Reported PAT at Rs.353.3mn was above the estimated Rs.325mn, only on account of higher other income. Net other income for the Q (Rs.44.6mn) included Rs.72.5mn towards reversal of provision for MTM losses on forward contracts and Rs.84mn towards loss on forward contracts. • Modify earnings to factor in Q2FY10 numbers; expect an FY10E EPS of Rs.26.1 (Rs.24 earlier). In FY11E, we expect revenues to grow 13% YoY; margins are likely to taper from FY10E levels given our assumptions on the INR, likely peak utilizations, wage inflation and increasing S&M investments, given an improving demand environm...

Infotech Enterprises. Infotech's results for 4QFY09 were a mixed bag; while revenue growth (1% QoQ) was modestly below estimate, EBITDA surprised positively with a 230bps gain QoQ. PBT was however below estimates given higher losses in the other income line. PAT (up 28% QoQ) came in at lower than estimate, aided by a deferred tax write back. Within verticals EMI was flattish QoQ; this vertical contributes c66% of company revenues. UTG vertical on the other hand grew by 2% QoQ. Volumes de-grew for the quarter by 0.5%; revenues were helped by the favourable INR (+0.3%) and price variation (+1.2%). Management in its commentary has outlined that the global economic slowdown is having a visible impact on client spends with additions/ ramp ups taking a hit. IEL, thus far had not seen sizeable client issues in its lines of business given its differentiated focus and also given the fact that engineering design (ED) spends have been relatively resilient, especially in the GIS business. Gi...