INSUBCONTINENT EXCLUSIVE:
so-called software plus services model, and will instead look to seal more deals in the growing digital economy
Digital revenue at the end of quarter to March stood at 26.8 per cent, a growth of 3.6 per cent QoQ in constant currency terms
company put out a 6-8 per cent revenue growth guidance for FY19 in constant currency terms against 5.8 per cent in FY18
But margin took a backseat as the guidance was scaled down to 22-24 per cent from 24.3 per cent in FY18 due to investment in digital
are likely to be perceived negatively by Street
However, we maintain Infosys as our top pick led by a) strong deal win momentum b) digital-focused strategy in place c) undemanding
valuations (14.9x FY20E EPS) and d) high dividend yield
dilutive, will be positive for long-term growth, given rising relevance of these services for clients, Edelweiss said
profits grew 2.4 per cent to Rs 3,690 crore and revenue by 5.6 per cent to Rs 18,083 crore
Infosys had reported profit of Rs 3,603 crore on revenue of Rs 17,120 crore between October and December 2017
reskilling employees and expanding localisation.
This means the IT outsourcer will step up investments to achieve these objectives, which
cent and 4.2 per cent, respectively as i) investments in building sales and digital capabilities will lead to 90 bps and 70 bps margin
Strong deal momentum and the move to distribute $2 billion cash to shareholders in FY19 over and above regular dividend are seen as
tailwinds.
As the marquee software exporter gets busy resetting its priorities and letting go off its past luggage, it might mean a short
pause in wealth creation from investor perspective.
