Infosys Q1 Results Hint At Company Revival

21/07/2015 11:57 AM IST | Updated 15/07/2016 8:25 AM IST
World Economic Forum/Flickr
DAVOS/SWITZERLAND, 21JAN15 - Vishal Sikka , Chief Executive Officer and Managing Director, Infosys, India captured during the session Inclusive Growth in the Digital Age in the congress centre at the Annual Meeting 2015 of the World Economic Forum in Davos, January 21, 2015. WORLD ECONOMIC FORUM/Benedikt von Loebell

Is Infosys finally on the comeback trail?

On Tuesday, Infosys announced its best results in 15 quarters suggesting that CEO Vishal Sikka's initiatives to buoy the company's long-depressed financial fortunes seem to be paying off.

"Our efforts in redesigning our clients' experience and our widespread adoption of innovation, both in grassroots and breakthroughs, are starting to bear fruit in large deal wins and in the growth of large clients," said Infosys CEO and Managing Director Vishal Sikka noted in the aftermath of the results.

Though the company's first-quarter net profit fell 4.5 percent to USD 476 million, it was in line with analyst expectations, who also hold that the real good news lies in the dollar revenues that surged 4.4 percent to USD 2.25 billion, ahead of both the previous quarter's numbers.

Sanjeev Hota, IT analyst at Sharekhan told NDTV that though Infosys' Q1 numbers are encouraging, it remains to be seen whether this growth rate can be sustained. "We need to see how fast Infosys is catching up with the industry growth rate," he added.

Mobis Phillipose in Mint however cautioned--before the results were announced-- that even if growth turns out to be in line with estimates, it was too early for the markets and the company to celebrate. "Of course, even if growth turns out to be in line with estimates, a year-on-year growth in the region of 3.5-4% is hardly anything to get excited about. To be fair to the company, it’s not even a year since its new chief executive officer took charge," he noted.

Analysts at JP Morgan say that rather than the numbers, it is Infosys's policies over the past three quarters that are reassuring. In an note before the earnings results were announced they listed out the many positives at Infosys to be "...declining attrition, increased net hiring, sales & marketing investments, and improvement in client progression metrics; so far, the metrics are trending in the right direction.”

Read here to know how Infosys has laid out its plan to once again scale the IT summit.

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