Infosys: Execution rigour is the mantra for the company going forward
The company should be able to hold on to its margins, a function of greater revenue per employee and lower headcount growth vis-a-vis revenue growth Infosys' constant currency revenue growth guidance of 6-8% year-on-year (y-o-y) for FY19 was on expected lines. The marginal beat can be ascribed to a weaker exit in 4Q (0.6% CC) than our expectation (1.5% CC). This implies that the compounded quarterly growth rate (CQGR) will be better if the guidance is met. To meet its guidance range of 6-8% y-o-y constant currency (CC) revenue growth in FY19, Infosys will have to clock a CQGR of 1.8-2.5% in the next year. We are assuming 7.5% y-o-y CC growth factoring the guidance and incremental revenue from the acquisition. A cross-currency tailwind of 130 basis points (bps) would imply USD revenue growth of 8.8% for FY19. Net profit grew 2.4% quarter-on-quarter (q-o-q) to Rs 36.9 billion, below our estimate of Rs 38 billion, due to an impairment loss of Rs 1 billion taken in re...