Infosys declares Q2 results: Five takeaways

For the second consecutive quarter, Infosys has delivered better-than-expected results. On Friday, India’s second-largest software services exporter said its September quarter sales grew 3.8% in dollar terms from June. Management commentary from the Bangalore-based company further reinforced perception that stability in growth is returning. Infosys’s financial performance also confirms the revival in demand in the US market, boding well for the rest of the Indian IT industry. Here are five takeaways from Infosys’s second-quarter earnings:

Growth on track: After struggling to match industry peers, Infosys has steadied itself on the revenue growth front. Guidance on the lower end has been raised but don’t be surprised if it outperforms its forecast of 9-10% for 2013-14.

Margins slip further: For the sixth time in a row, the operating profit margin has fallen. At 21.8% it is close to the levels of Wipro, regarded as a margin laggard.

Attrition worry: The rate at which employees are deserting the Bangalore company despite a salary raise, Infosys could be in a serious spot of bother.

Utilisation: Nearly three-fourths of its workforce is engaged in revenue-generating activity, but this must improve further to help margins.

Hiring: With growth back on track, net hiring is on the rise. Infosys now has more than 1.6 lakh employees.