Infy reports 19% QoQ growth in profits

Fri, 10 Jan 09:30 am

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Asian stock markets have opened the day on a mixed note with South Korea (down 0.6%) and China (down 0.5%) leading the losses. However, markets in Indonesia (up 0.4%) and Hong Kong (up 0.3%) are trading firm. The Indian share markets have opened the day on a negative note. Stocks in the metal and banking space are leading the losses. However, information technology stocks are trading firm.

The Sensex today is down by around 50 points (0.2%), while the NSE-Nifty is down by around 17 points (0.3%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.4% and 0.2% respectively. The rupee is currently trading at Rs 62.09 to the US dollar.

Information technology stocks have opened the day on a firm note with Infosys Ltd, Tech Mahindra and HCL Infosystems leading the gains. India's second largest software services firm Infosys has announced its results for the third quarter of the financial year 2013-14 (3QFY14). During the quarter, the company reported consolidated revenues of about Rs 130.3 bn, marginally higher by 0.5% on a quarter-on-quarter (QoQ) basis. Gross profit for the quarter grew by 2.7% QoQ to Rs 47.1 bn on account of 0.8% QoQ decline in cost of sales. Gross profit margins expanded from 35.3% in 2QFY14 to 36.1% in 3QFY14. Operating profits reported a surge of 14.9% QoQ owing to lower selling and marketing expenses and administrative expenses. Net other income increased by 43.3% QoQ to Rs 7.3 bn. At the bottomline level, net profit increased by 19.4% QoQ to Rs 28.8 bn. Net profit margin expanded from 18.6% in 2QFY14 to 22.1% in 3QFY14. The stock of Infosys is currently up 2%.

PSU Bank stocks have opened the day on a weak note with Canara Bank, Union Bank of India and Indian Bank leading the gains. As per a leading financial daily, several public sector banks are likely to announce interim dividends for the financial year 2013-14. Eight PSU banks have lined up board meetings this month to take decision on interim dividends. Union Bank of India has already declared an interim dividend of Rs 2.7 per share. It must be noted that this is seen as an attempt to aid the government in meeting its fiscal deficit target for the current fiscal. The banks are lining up interim dividends at a time when most of them have witnessed a substantial drop in profits and increase in non-performing assets (NPA). The news daily has reported Crisil estimates that the government would be able to cut down the fiscal deficit by about 0.2% of the Gross Domestic Product (approximately Rs 200 bn) by using the dividends of PSU banks.