Infosys result update q4 fy12
 

Infosys result update q4 fy12

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Infosys result update q4 fy12 Infosys result update q4 fy12 Presentation Transcript

  • Quarterly Result Update Infosys Ltd. Concerns on volume growth and disappointing outlook for FY13 Outlook Recommendation (Rs) CMP 2,403 Ironically, Infosys which traditionally has overshot its own guidance has now for the last three quarters been Rating SELL struggling to meet its own forecast. With global budgetary allocations being cut and actual spending lagging Index Details these reduced allocations we believe that the entire IT industry is going to be under pressure. Infosys Sensex 17,094 guidance on flat pricing and volume growth of 8-10% growth for FY13 was disappointing and we expect the Nifty 5,207 stock to underperform going forward. Industry IT - Software Also the FSI space which constitutes ~35% of Infosys’ business has been impacted due to delays in decision Scrip Details making and reduced IT spends due to more lenient regulation. Further, the macro economic situation in Europe (~30% of revenues) is also expected to deteriorate and affect discretionary IT spending and remains Mkt Cap (Rs cr) 138,004 a high risk. With the decision to hike salaries being deferred we expect attrition levels to increase, in case Eq Shares O/s (Cr) 57.4 competition implements even moderate wage hikes. Margins (at 32.8% are down by 90 bps QoQ) could also AvgVol (Lakhs) 1.2 3305/21 come under pressure in case intense competition leads to pricing pressures. 52 Week H/L 69 Dividend Yield (%) 2.2 In the light of above mentioned facts we expect revenue and earnings to grow at a CAGR of 8.7% & 6.1% to Face Value (Rs) 5.0 Rs 39680 crore and Rs 9362 crore by FY14. In our opinion there is a further downside risk of 7% (Target price of Rs 2234 at 15x FY13 PE) over a period of 12 months. We recommend a SELL on the stock. Latest shareholding pattern (%) Promoters 16.0 Key Takeaways Indian Institutions 16.6 FII’s 39.0 Citing the risks from slower growth in developed markets and challenging environment in Europe markets the Public 28.4 company has given lower than expected FY13 dollar revenue growth guidance of 8-10% (12-14% expected) Total 100.0 which translates into revenues of $ 7,553 mn-$7,692 mn. The company expects decline 50-100 bps in OPM for FY13 Meanwhile, the company guided for flattish kind of revenue growth for Q1FY13. Stock performance (%) Impacted by dip in volume growth (-1.5% QoQ), appreciation of rupee (-2.7% QoQ) and pricing declines 1m 3m 6m (1.1%) Infosys has posted a topline of Rs 8,852 crore for Q4FY12 (-4.8% QoQ) which was marginally ahead Infosys Ltd. -15.6 -7.1 -10.8 Nifty -4.1 7.0 2.6 of our expectations. Aided by currency appreciation and pricing gains, the company posted Revenues of BSE – IT -11.6 -1.4 -2.7 33,734 crore for FY12, a growth of 22.7% on YoY basis. th Friday, 13 April, 2012 .
  • Quarterly Result Update Operating margins during the current quarter remained under pressure at 32.8% (-90 bps QoQ). This was largely attributable to currency losses, pricing decline and lower utilisation rates. Considering the macro environment the company has delayed wage hike decision to second half of FY13. Loss on operating front was compensated by higher other income which grew by 47.5% on sequential quarter basis to Rs 662 crore on account of higher interest income. As result of this Net Profit for the current quarter declined by 2.4% QoQ to Rs 2,316 crore. In terms of industrial segments the growth of BFSI segment (-4.6% QoQ) remained under pressure on account of slow decision making and relaxation of banking regulatory norms especially in European region.Driven by strong execution from Auto segment Manufacturing posted a QoQ growth of 2.2%. Meanwhile Retail, Logistics, CPG & Life Sciences segments degrew by 2.9% on sequential quarter basis. Energy & Utilities, Communications and Services also remained subdued with sequential degrowth of 0.3%. With addition of 52 new clients, the number of active clients has reached 694 by end of Q3FY12. During the current quarter company signed 5 large deals which also included 3 deals from North American geography. Utilization rate excluding trainees stood at 67.2%, a decline 220bps on sequential quarter basis. Hiring at gross level for FY12 stood at 45,605, which was aggressive as compared against guidance of 45,000. Attrition rate also improved by 70 bps on sequential quarter basis to 14.7%which is encouraging sign for the company. th Friday, 13 Apr, 2012
  • Quarterly Result UpdateDescription Q4FY12 Q4FY11 % Chg. Q4FY12 Q3FY12 % Chg. FY201203 FY201103 % Chg.Net Sales 8852.0 7250.0 22.1 8852.0 9298.0 -4.8 33734.0 27501.0 22.7Other operational Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total Oper. Income(TOI) 8852.0 7250.0 22.1 8852.0 9298.0 -4.8 33734.0 27501.0 22.7Raw Materials Cons.- 412.0 282.0 46.1 412.0 448.0 -8.0 1468.0 1060.0 38.5% to TOI 4.7 3.9 - 4.7 4.8 - 4.4 3.9 -Stock adj. (-)Inc / (+)Dec- 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0% to TOI 0.0 0.0 - 0.0 0.0 - 0.0 0.0 -Net Raw Mat adj. for stock 412.0 282.0 46.1 412.0 448.0 -8.0 1468.0 1060.0 38.5% to TOI 4.7 3.9 - 4.7 4.8 - 4.4 3.9 -Other expenses 1006.0 914.0 10.1 1006.0 1111.0 -9.5 4147.0 3483.0 19.1% to TOI 11.4 12.6 - 11.4 12.0 - 12.5 12.7 -Contribution Net_Sales 7434.0 6054.0 22.8 7434.0 7719.0 -3.7 28066.0 22938.0 22.4Personnel 4787.0 3952.0 21.1 4787.0 4840.0 -1.1 18340.0 14856.0 23.5% to TOI 54.1 54.5 - 54.1 52.1 - 54.4 54.0 -Total expenditure 6205.0 5148.0 20.5 6205.0 6399.0 -3.0 23955.0 19399.0 23.5Operating Profit 2647.0 2102.0 25.9 2647.0 2899.0 -8.7 9779.0 8102.0 20.7% to TOI 29.9 29.0 - 29.9 31.2 - 28.8 29.4 -Non-Operating Income 652.0 415.0 57.1 652.0 442.0 47.5 1957.0 1231.0 59.0Interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Exceptional Items 0.0 0.0 0.0 0.0 20.0 -100.0 53.0 20.0 165.0Gross Profit 3299.0 2517.0 31.1 3299.0 3321.0 -0.7 11683.0 9313.0 25.5Depreciation 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0PBT before Extra-ord 3299.0 2517.0 31.1 3299.0 3321.0 -0.7 11683.0 9313.0 25.5% to TOI 37.3 34.7 - 37.3 35.7 - 34.6 33.9 -Extraordinary Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0PBT 3299.0 2517.0 31.1 3299.0 3321.0 -0.7 11683.0 9313.0 25.5Tax Rate 29.8 27.8 7.3 29.8 28.6 4.3 28.8 26.7 7.8Prov. for Tax 983.0 699.0 40.6 983.0 949.0 3.6 3367.0 2490.0 35.2% to TOI 11.1 9.6 - 11.1 10.2 - 10.0 9.1 -Profit after Tax 2316.0 1818.0 27.4 2316.0 2372.0 -2.4 8316.0 6823.0 21.9% to TOI 26.2 25.1 - 26.2 25.5 - 24.7 24.8 -Minority Interest - - - - - - - - -PAT (adj. For MI) 2316.0 1818.0 27.4 2316.0 2372.0 -2.4 8316.0 6823.0 21.9Face Value 5.0 5.0 - 5.0 5.0 - 5.0 5.0 -Equity Share capital 286.0 286.0 - 286.0 286.0 - 286.0 286.0 -EPS (Rs.) 40.5 31.8 27.4 40.5 41.5 -2.4 145.4 119.3 21.9CEPS (Rs.) 40.5 31.8 27.4 40.5 41.5 -2.4 145.4 119.3 21.9 th Friday, 13 Apr, 2012
  • Quarterly Result Update Financials and Projections Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e Y/E March, Fig in Rs. Cr FY 2011 FY 2012e FY 2013e FY 2014e Profit & Loss Statement Per Share Data (Rs) Net Sales 27501 33734 37161 39860 EPS 119 146 149 164 % Chg. 22.7 10.2 7.3 Cash EPS 134.4 162.1 168.7 186.9 Total Expenditure 18545 23008 25722 27456 DPS 60 47 30 30 % Chg. 24.1 11.8 6.7 Book Value 477.9 585.6 699.6 828.4 EBDITA 8956 10726 11440 12404 Capital, Liquidity, Returns Ratio EBDITA Margin % 33 32 31 31 Debt / Equity (x) 0.0 0.0 0.0 0.0 Other Income 1211 1904 1848 2286 Current Ratio (x) 6.5 6.3 7.2 8.2 PBDIT 10167 12630 13288 14690 ROE (%) 25.0 24.9 21.3 19.8 Depreciation 854 947 1130 1315 ROCE (%) 36.8 37.6 33.1 31.0 Interest 0 0 0 0 Dividend Yield (%) 2.5 2.0 1.2 1.2 Exceptional items 0 0 0 0 Valuation Ratio (x) PBT 9313 11683 12158 13374 P/E 20.1 16.5 16.1 14.7 Tax Provisions 2490 3367 3647 4012 P/BV 5.0 4.1 3.4 2.9 Reported PAT 6823 8316 8511 9362 EV/Sales 4.2 3.5 3.1 2.9 PAT Margin (%) 24.8 24.7 22.9 23.5 EV/EBIDTA 13.0 10.9 10.2 9.4 Software Dev Cost (%) 54.8 55.9 56.2 54.9 Efficiency Ratio (x) Sales & Mark Exp/ Sales (%) 5.5 5.2 5.5 6.0 Debtors (days) 77.2 77.2 77.8 75.6 Gen Admin Exp / Sales (%) 7.2 7.1 7.5 8.0 Other Current Assets (days) 12.9 11.2 11.2 11.2 Tax Rate (%) 26.7 28.8 30.0 30.0 Creditors (days) 14.0 11.1 13.0 12.7 Balance Sheet Cash Flow statement Share Capital 286 286 286 286 Profit After Tax 6823 8316 8511 9362 Reserves & Surplus 27017 33175 39685 47048 Depreciation 854 947 1130 1315 Minority Interest 0 0 0 0 Working Capital Changes -1360 -1274 246 -378 Total Loans 0 0 0 0 Others -500 1044 0 0 Others 319 121 121 121 Operating Cash Flow 5817 9033 9886 10300 Total Liabilities 27622 33582 40093 47455 Capital Expenditure -1248 -1524 -2201 -2401 Goodwill & Intangibles 873 974 961 948 Change in Investment 3579 -222 361 0 Gross Block 7573 8730 10330 11930 Cash Flow from Investing 2331 -1746 -1840 -2401 Less: Acc. Depreciation 3254 4209 5326 6629 Proceeds from equity issue 72 168 0 0 Net Block 4319 4521 5004 5301 Inc/ Dec in Debt 0 0 0 0 Capital Work in Progress 525 1080 1696 2496 Dividend and DDT -3665 -3014 -2000 -2000 Net Current Assets 20048 25480 30904 37181 Cash Flow from Financing -3593 -2846 -2000 -2000 Deferred Tax Assets 1371 1353 1354 1355 Net Change in Cash 4555 4442 6046 5898 Misc Expenses 486 174 174 174 Opening Cash Balance 12111 16666 20591 26638 Total Assets 27622 33582 40093 47455 Closing Cash Balance 16666 21107 26637 32537 th Friday, 13 Apr, 2012
  • Quarterly Result Update P/E Bands P/B Bands EV/EBITDA Bands 7000 8000 350000 6000 7000 300000 5000 6000 250000 5000 4000 200000 4000 3000 150000 3000 2000 2000 100000 1000 1000 50000 0 0 0 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12 CMP 16X 21X 26X 31X 36X CMP 5X 6.5X 8X 9.5X 11X EV 12X 15X 18X 21X 24X NIFTY Comparison Sectoral Index Comparison Rating Charts105.0 105.0100.0 100.0 30 EXPECTED 2YR EPS CAGR% 95.0 95.0 HCL TECH 25 90.0 90.0 85.0 85.0 20 INFOSYS 80.0 80.0 TCS 15 75.0 75.0 WIPRO 70.0 70.0 10 65.0 65.0 5 60.0 60.0 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 0 0 1 2 3 4 5 6 INFOSYS NIFTY INFOSYS BSEIT RATING SCORE th Friday, 13 Apr, 2012
  • Quarterly Result Update RONW Vs P/E Volumes Growth (%) Operating Margin (%) 50.0 8.0% 35% TCS 34% 45.0 7.0% 40.0 6.0% 33% 35.0 32% 5.0% 30.0 31% Mphasis Infosys HCL Tech 4.0% Tech Mah. 30%ROE 25.0 3.0% 29% 20.0 NIIT Tech Mindtree Oracle Wipro 2.0% 28% 15.0 Patni 27% 1.0% 10.0 Geometric 0.0% 26% 5.0 Q1 FY11 Q2 FY11 Q3 FY11 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Q2 FY11 Q4 FY11 Q2 FY12 Q3 FY12 Q4 FY12 Q1 FY11 Q3 FY11 Q1 FY12 0.0 -1.0% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 -2.0% P/E Geographical Segmentation of Revenues Quarter ended 12 Months Revenue by Geographical Segment Mar 31, 2012 Dec 31, 2011 Mar 31, 2011 Mar 31, 2012 Mar 31, 2011 % % % % % North America 62.4 63.7 63.7 63.9 65.3 Europe 23.1 22.6 22.1 21.9 21.5 India 2 2.1 2.7 2.2 2.2 Rest of the World 12.5 11.6 11.5 12 11 Total 100 100 100 100 100 th Friday, 13 Apr, 2012
  • Quarterly Result Update Revenue Break up by Industry Verticals Quarter ended 12 Months Revenue by Industry Mar 31, 2012 Dec 31, 2011 Mar 31, 2011 Mar 31, 2012 Mar 31, 2011 % % % % % Insurance, banking & financial Services 34.3 35.3 35.7 35.1 35.9 Banking & financial services 27.4 27.9 28.5 27.9 27.8 Insurance 6.9 7.4 7.2 7.2 8.1 Manufacturing 21.3 20.4 20.4 20.5 19.6 Retail & Life Sciences 22.9 23.1 21.4 23 20.5 Retail & CPG 15.8 15.2 14.5 15.7 14.2 Transport & Logistics 1.6 2 2.1 1.8 1.9 Life Sciences 3.9 4.1 3.7 3.9 3.4 Healthcare 1.6 1.8 1.1 1.6 1 Energy & Utilities Communication Services 21.5 21.2 22.5 21.4 24 Energy & Utilities 6.1 6 5.8 5.9 6.1 Telecom 10.1 9.8 11.9 10.2 12.9 Others 5.3 5.4 4.8 5.3 5 Total 100 100 100 100 100 th Friday, 13 Apr, 2012
  • Quarterly Result Update Break up of Onsite & Offsite Revenues and Utilization levels Quarter ended 12 Months Effort and Utilization Mar 31, 2012 Dec 31, 2011 Mar 31, 2011 Mar 31, 2012 Mar 31, 2011 % % % % % Effort Onsite 24.6 24.8 24.6 25.0 24.2 Offshore 75.4 75.2 75.4 75.0 75.8 Revenue Onsite 49.6 49.5 49.3 49.9 49.2 Offshore 50.4 50.5 50.7 50.1 50.8 Utilization Including trainees 67.2 69.9 68.4 69.2 72 Excluding trainees 73 77.4 75.2 75.6 78.9 Break up of revenues by Service Verticals Quarter ended 12 Months Revenue by Service offering Mar 31, 2012 Dec 31, 2011 Mar 31, 2011 Mar31, 2012 Mar31, 2011 % % % % % Services Business IT Services 62.7 63.6 61.8 63 62.8 Application Development 16.9 17.1 16.1 16.8 16 Application Maintenance 20.9 21.8 22 21.6 22.9 Infrastructure Management Service 6.2 6.1 6.1 6.0 6.3 Testing Services 7.8 7.9 7.3 7.9 7.5 Business Process Management Service 3.4 3.6 2.4 3.4 2.4 Product Engineering Services 4.8 4.4 4.9 4.6 4.9 Others 2.7 2.7 3 2.7 2.8 Consulting & System Integration 31.1 30.6 31.7 31.2 31.2 Products, Platforms and Solutions 6.2 5.9 6.5 5.8 6 Products 4.4 4.8 5.4 4.6 4.9 BPM Platform 1.4 0.8 0.7 0.9 0.7 Others 0.4 0.3 0.4 0.3 0.4 Total 100 100 100 100 100 th Friday, 13 Apr, 2012
  • Quarterly Result UpdateVentura Securities LimitedCorporate Office: C-112/116, Bldg No. 1, Kailash Industrial Complex, Park Site, Vikhroli (W), Mumbai – 400079This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but noresponsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in theirarticles. Neither Ventura Securities Limited nor any of the contributors accepts any liability arising out of the above information/articles. Reproduction in whole orin part without written permission is prohibited. This report is for private circulation. th Friday, 13 Apr, 2012