Infosys

4.5% QoQ organic revenue growth in USD terms, the highest in 15 quarters, lead to Infosys’ Q1FY16 consolidated revenue increasing 7% QoQ in Rupee terms to Rs. 14,354 crore. Infosys’s colume growth of 5.4% QoQ, its highest in 19 quarters, fared much better than rival TCS’s 4.8% volume growth. While all of Infosys’ industry verticals grew sequentially, the ones posting the highest profitable growth were energy, utilities and communication and manufacturing.

Company added 79 gross new clients, taking active client count to 987, as of 30-6-15, up 37 or 3.9% sequentially. It signed 6 large deals with total contract value of USD 688 million in Q1, indicating higher revenue visibility for the coming quarters. Despite utilization (excluding trainees) expanding 160 bps QoQ to 80.2%, net profit decline 2.2% QoQ to Rs. 3,030 crore as cost of sale, including staff costs rose in double digits sequentially.  

However, thanks to the weakening rupee company has retained FY16 revenue guidance at 10%-12% in constant currency terms, while increasing in US$ terms to 7.2%-9.2%, which is a reason for celebration. With EPS of Rs. 13.26 for Q1FY16, share is currently trading at a PE multiple of slightly above 20 times, vis-à-vis TCS’s PE multiple of 22x, narrowing the valuation gaps between the two IT giants.