Key takeaways from Infosys Q2 result

Zee Media Bureau

The share price of the global software major Infosys slid 3.88 percent and closed at Rs 1122 on BSE on Monday. The fall occurred despite the fact that the company maintained that the consolidated revenue for FY 2016 would grow 13-15 percent in rupee terms, and consolidated net profit for the quarter ended September 2015 stood at Rs 3,398 crore. Clearly, the investors seemed jittery on the fundamentals of the company.

Following are the three key takeaways from Infosys Limited's results:

Total Income: Infosys standalone total income increased by 12.63 percent to Rs 14,299 crore for the quarter under review from Rs 12,696 crore for the corresponding quarter of the previous year. On a consolidated basis, the company posted net profit of Rs 16,428 crore, up 15.53 percent, against Rs 14,219 crore in the same quarter last year.

Infosys numbers should be seen in the light of the volatile currency days, the reason why the company gave a lowered revenue guidance in dollar terms; and should not concern the long-term investors. The company has consistently come out with positive quarter-on-quarter (QoQ) results  in FY16 so far, which should be seen as the outcome of the robust fundamentals of the company.

Global earning: Infosys results have come out at a time when global spending was at its lowest in years. Yet, the positive is that Infosys revenues from Europe grew 8.3% QoQ, Given the cut in spending by European companies, the IT software exporters like Infosys are bound to get slowed don.

Turning into a new leaf: The company is undergoing an evolution in an environment where project-based work has shifted to new technologies such as cloud computing.  Markets may get impatient while that happens. The exit of CFO Rajiv Bansal from the company signals to the larger problem of attrition that the company faces. Attrition rate of Infosys increased to 19.9 per cent from 19.2 per cent on quarter on quarter basis.