Infosys PAT higher than our expectations: Sarabjit Kour Nangra, Angel Broking

In a chat with ET Now, Sarabjit Kour Nangra, VP-Research, Angel Broking, shares her views on Infy results. Excerpts:

ET Now: Infosys PAT, according to us, is above estimates. What is your initial take?

Sarabjit Kour Nangra: Yes, sales are in line, as you said, and definitely even PAT is higher than our expectations. But probably I need to see a play of margin expansion. I am not sure how much they can achieve in this quarter because of just currency. That could be, but the higher probability would be other income and a play of depreciation because IT companies for this year are playing on a low depreciation. So these two factors I would like to be giving more consideration than margin at this quarter actually.

ET Now: Were you expecting that there would be such a surprise in profitability? Sales are pretty much in line with expectation. What explains the profit surprise, did you factor in anything?

Sarabjit Kour Nangra: That is what I said. It could be possibly other income, margins. I mean there are three levers which IT companies are showing in terms of profitability. One is lower depreciation happening this year, second is other income and margins. So I see less probability in margin. It has more to do with the other income and possibly I guess deprecation play. I do not see margin, but if margin comes higher than expectation, then that would be a major surprise, actually that will be a very positive. The rest of the two factors broadly will not be considered or given that weightage actually.