Infosys Ltd (NSE:INFY) Posts Surprising 3.2% Dollar Revenue Growth in Q2 2018


Infosys Ltd (NSE:INFY) surprised the market by posting 3.2% dollar revenue growth in Q2 2018 in September. It is the fastest growth in order by the second-largest technology (IT) services company in India in a year or more. The Q2 revenue of Infosys rose by 4.2% from the previous 3 months.

Currency fluctuations slow down Infosys revenue growth in Q2 2018

Fluctuations in currency, however, affected the growth of the company as the dollar revenue increased very slowly to $2.92 billion in the quarter ending on September 30. The company posted its last sequential dollar revenue growth for the June quarter in 2017. The net profit of the company increased to $581 million in the Q2 2018. Infosys reported a net profit of $578 million in the previous three months –FQ 2018. However, the operating margin for both June and September quarter remained constant at 23.7%.

According to reports, the orderly 4.7% growth from the clients in the financial services field helped Infosys to post a better than expected performance and revenue growth in Q2 2018. It ultimately led to 32.2% revenue. The company also posted an increase of 4.9% in business coming from retail clients and 17% revenue coming from accounting. The company won new deals worth more than $2 billion in this one quarter.

An analyst working at a foreign brokerage based in Mumbai said, “Both Tata Consultancy Services Limited (NSE:TCS) and Infosys have done well in the second quarter. But TCS has the edge over Infosys as they have been reporting a double-digit, year-on-year growth for three straight quarters. But a $2 billion in deal wins is encouraging.”

Major acquisitions by Infosys in Q2 2018

Infosys made some major acquisitions that contributed to its revenue growth in Q2 2018. On September 7, the wholly-owned subsidiary of the Indian IT company, Infosys Consulting Pte Limited acquired 60% stake in the Temasek Management Services’ wholly owned subsidiary Trusted Source. Temasek is an IT services company from Singapore. The two companies signed a deal of around $9 million.

Apart from that, Infosys Consulting acquired 100% voting interest in a Nordic-based consulting partner and salesforce advisor in the field of cloud consultation, implementation and training services, Fluido Oy. The Indian company signed a deal of around $75 million with this firm.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.