INFOSYS LTD = RESULTS FOR = Q3 FY 2012 = Q/E DEC,2011 = NPT UP 33.3% YOY; 49 CLIENTS ADDED;= EXCELLENT PERFORMANCE = CAN BEAT GUIDANCE FOR Q4

INFOSYS

Consolidated results under IFRS

for the 3^rd Q/E 
December 31, 2011

INFOSYS  has declared excellent Results for the third quarter ending Dec,2011.

Revenues were Rs.9,298 crore for the quarter ended December 31, 2011; QoQ growth was 14.8%; YoY growth was 30.8%

Net profit after tax was Rs.2,372 crore for the quarter ended December 31, 2011; QoQ growth was 24.4%; YoY growth was 33.3%

Earnings per share (EPS) was Rs.41.51 for the quarter ended December 31, 2011; QoQ growth was 24.4%; YoY growth was 33.3%

Others

49 clients were added during the quarter by Infosys and its subsidiaries. The addition is impressive and indicates the renewed vigour with which Infy is functioning after the Board Revamp.

Gross addition of 9,655 employees (net addition of 3,266) for the quarter by Infosys and its subsidiaries

1,45,088 employees as on December 31, 2011 for Infosys and its subsidiaries

“The global economy, driven by slower growth in developed markets coupled with the European crisis, could impact the growth of the IT industry,” said S. D. Shibulal, CEO and Managing Director. “Notwithstanding short-term challenges, we are focused on long-term growth opportunities by investing in platforms and solutions - which will accelerate innovation, enhance returns for our clients and deliver higher business value.”

Business outlook

The company’s outlook (consolidated) for the quarter ending March 31, 2012 and for the fiscal year ending March 31, 2012, under IFRS is as follows:

Outlook under IFRS – consolidated*

Quarter ending March 31, 2012

Ø  Revenues are expected to be in the range of `9,391 crore and `9,412 crore; YoY growth of 29.5% to 29.8%

Ø  Earnings per share (EPS) is expected to be `42.12; YoY growth of 32.4%

Fiscal year ending March 31, 2012

Ø  Revenues are expected to be in the range of Rs.34,273 crore and Rs.34,294 crore; YoY growth of 24.6% to 24.7%

Ø  Earnings per share (EPS) is expected to be Rs.147.13; YoY growth of 23.2%

* Conversion 1 US$ = Rs.52.00

Details of Revenue statement

indicating Item, Rs.in Cr for 

(1) 3 m/e Dec,2011, (2) 3 m/e Dec,2010,

(3) 9 m/e Dec,2011 and (4) 9 m/e dec,2010

Revenues	9,298	7,106	24,882	20,251
Cost of sales	5,288	4,063	14,609	11,682
Gross profit	4,010	3,043	10,273	8,569
Total operating expenses	1,111	896	3,141	2,569
Operating profit	2,899	2,147	7,132	6,000
Other income, net	422	290	1,252	796
Profit before income taxes	3,321	2,437	8,384	6,796
Income tax expense	949	657	2,384	1,791
Net profit	2,372	1,780	6,000	5,005
Other comprehensive income
Total comprehensive income	2,501	1,794	6,191	5,033
Earnings per equity share
Basic (`)	41.51	31.15	105.01	87.62
Diluted (`)	41.51	31.14	105.01	87.59

IFRS – US DOLLARS

Infosys (NASDAQ: INFY) Announces Results for the Quarter Ended December 31, 2011 – in US Dollar terms as below :

Highlights

Consolidated results under International Financial Reporting Standards (IFRS) for the quarter ended December 31, 2011

Ø  Revenues were $1,806 million for the quarter ended December 31, 2011; QoQ growth was 3.4%; YoY growth was 13.9%

Ø  Net income after tax was $458 million for the quarter ended December 31, 2011; QoQ growth was 11.4%; YoY growth was 15.4%

Ø  Earnings per American Depositary Share (EPADS) was $0.80 for the quarter ended December 31, 2011; QoQ growth was 11.1%; YoY growth was 15.9%

Products, Platforms and Solutions

Products, platforms and solutions continue to gain momentum and accelerate our non-linear growth.

Finacle™

Finacle™, the universal banking solution, continued its growth trajectory, adding 10 wins this quarter. Of these, four were from Europe, Middle East and Africa (EMEA) and six from the Asia Pacific (APAC) region. 26 projects went live in the quarter. Of these, 14 went live in APAC, 10 in EMEA and two in the Americas. 

Finacle™ solutions received many industry analyst recognitions during the quarter. Aite Group commended Finacle™ mobile banking solution offering for its technology architecture and broad functionality in its vendor assessment report - Mainstreaming Mobile: A Review of Mobile Banking Vendors. Javelin Strategy & Research recognized Finacle™ mobile banking solution for its tri-mode access capabilities, namely Unstructured Supplementary Service Data (USSD) support, focus on cost and compliance and providing a full segmented solution to meet differing market needs in the ‘2011 – 2012 Mobile Banking Vendor Scorecard’.

Infosys SocialEdge™

A global sports brand selected Infosys SocialEdge™ to create a next-generation collaborative community to enable its employees to interact globally. This initiative is aimed to enhance workforce productivity, enable co-creation and foster innovation across different departments. A leading information company selected Infosys SocialEdge™ to design and implement a consumer engagement initiative targeted towards its special interest groups, helping the client interact with its customers and drive new revenue streams. Infosys SocialEdge™ social analytics solution is being utilized by a European high-tech manufacturer to understand consumer sentiment, brand perception and define its consumer engagement roadmap.

Cloud

Infosys continues to see strong momentum with our Cloud practice, winning over 15 deals this quarter. As a Cloud Ecosystem Integrator, Infosys set up a private Cloud environment to provide enhanced customer service for one of the largest telecom majors in APAC. 

Infosys and Microsoft signed a Memorandum of Understanding (MoU) for Cloud. Under this alliance Microsoft brings together its proven Cloud technologies including Windows Azure, Office 365 and private cloud with Infosys’ global presence, deep industry expertise, breadth of services and innovative offerings to co-create and architect Cloud environments for clients, while developing solutions across hybrid Cloud setup.

Mobility

Infosys’ mobility offerings are witnessing tremendous interest from its clients globally. Infosys is helping a European telco revamp its point of sale operations in its retail stores by bringing in a mobile point of sale solution. An American gifts and greeting cards major engaged Infosys to create a unique mobile based catalog of offerings, based on Infosys’ mBrochure solution. 

For an American financial services company, we created a unique mobile based personal card and expense management solution that has been launched in six major markets. We developed a mobile based store/warehouse locator solution to help optimize field force operations of an American industrial products giant.

Sustainability

Clients continue to engage Infosys in their efforts towards achieving sustainable growth. A fashion eyewear company selected Infosys to implement an industry-leading Enterprise Carbon, Energy and Resource Management (ECERM) software to monitor, analyze and report its energy and resource consumption. A major consumer electronics manufacturer partnered with Infosys to build the foundation for a Full Material Disclosure (FMD) global platform for regulatory compliance.

India Business Unit

Infosys continues to see traction in the Indian market. It has won a strategic deal with a large telecom operator based in India to provide a campaign management solution based on SAS Campaign manager and Vertica solution from HP. Using this solution, the client will be able to provide near real-time promotions to subscribers triggered by specific events and usage behavior. Over time, the solution will scale up to cover a larger subscriber base for the operator, increasing revenues and improving customer loyalty. Infosys has been selected by one of the largest aluminum manufacturers in India for an end-to-end application implementation project.

Process Innovation

During the third quarter, Infosys applied for 30 patent applications in India and the U.S. With this, Infosys has an aggregate of 449 patent applications (pending) in India and the U.S. and has been granted 35 patents by the United States Patent and Trademark Office.

Liquidity

As on December 31, 2011, cash and cash equivalents, including investments in available-for-sale financial assets and certificates of deposits was $3.7 bn ($3.6 bn as on December 31, 2010)

“The global currency market continues to be volatile with the Indian rupee depreciating by 11% during the quarter,” said V. Balakrishnan, Member of the Board and Chief Financial Officer. “Managing extreme currency volatility in an uncertain economic environment is going to be a challenge for the industry. We believe our focus on high-quality growth combined with our flexible financial model will position us better during these challenging times.”

COMMENTS :

 Infosys beat market forecasts with a 33 % rise in quarterly profit as a weak rupee boosted margins. All of India's software services companies will be facing a slower pace of outsourcing contracts in Q4 due to the lingering debt crisis in Europe. But, currently efforts are under way to resolve the crisis. By 1^st Q of 2012-13, we can hope for some clarity on European Front.

Infosys forecast dollar revenue growth of 16.4 percent for the fiscal year to March 31, down from 17.1 percent to 19.1 percent projected in October.

Consolidated net profit of 23.72 billion rupees in Q3 FY 12, compared to 17.8 billion rupees a year earlier, is helped by an 8 percent fall in the rupee.

Infosys is now adding customers at a VERY GOOD PACE. In current Qtr, it has added 49 clients

Prior to the Board revamp, Infosys was trading very listlessly on the bourses. But, the last qtr results proved that the Board Revamp has helped Infosys beat all uncertainties – and is now energetically pursuing progress.

Though, it has its guidance slightly – it is most likely that it will  conform to earlier, higher Forecasts – based on the higher client addition taking place now.

When we listen to the Board members of INFOSYS - we find that they do exhibit a lot of confidence in their ability to perform - in future as well. Even if one segment shows some weakness, other segments are likely to more than neutralise such weak segments.

Infosys forecast dollar revenue growth of 16.4 percent for the fiscal year to March 31, down from the 17.1 percent to 19.1 percent projected in October

Despite gloomy forecasts for 2012 (calendar Year) from some research firms – it is felt that – we are still at the beginning of 2012 and already US economy is looking up well – and efforts are under way to resolve Euro crisis. So, 2012 Calendar Year may still surprise us by being much better than 2011. The Q4 FY 12 (Sep-Dec,2011) will conform to guidance for sure – but can also improve to the level of earlier, HIGHER guidance. 

The number of customer wins - especially of High value customers - has been very impressive in Q3 and the benefits of that will start flowing in future. We must remember that Infosys guidance is always conservative in Nature. Therefore, we need not be PESSIMISTIC on Q4 FY 12.

Annual EPS is forecast at Rs.147. Current MP is around Rs.2635. 52 week high price was Rs.3443.15 and the 52 week low price was Rs.2161.50.

Price Earning Ratio is hardly 17.925 at these levels. For Infosys, this PE ratio is certainly very LOW. In a normal market, Infosys can scale to much higher levels, giving good returns to medium / long term Investors.

*  *  *  E  N  D  *  *  *