Infosys beats expectations, sets trend for IT peers

Infosys reported a better-thanexpected consolidated net profit of Rs 3,096 crore, a growth of 7.3% qoq and 28.6% yoy. It also maintained the previous guidance for 2014-15. The IT major also declared a Rs 30 per share interim dividend and a 1:1 bonus issue. The market reacted positively to the news and the counter gained 6.68% on Friday, in a day when the Sensex tanked by 1.28%.

Other companies from the IT sector are also expected to extend the growth momentum seen in the first quarter of the current financial year on the back of improving visibility in the US markets and higher off-shoring from Europe. This is a seasonally strong quarter for the IT sector. Infosys’ topline growth would have been higher if there was no depreciation in the global currencies, such as the British pound, euro and yen, against the US dollar.

Among the large players, TCS is expected to report the highest topline and bottomline growth among its Indian peers, following the merger with its Japanese entity. Around $100 million will come from the merger of Mitsubishi Corp’s ITF. Margin pressure may be experienced by HCL Tech and Wipro because of the recent wage hikes