IT giant Infosys announced its quarter result this week, setting the tone for the earnings season. Trouble was, the news wasn’t all good. While the company’s numbers are in line with street estimates, global uncertainty has forced it to cut its guidance. Infosys has slashed its revenue growth forecast for a second time this financial year. It now stands at just 16%. That’s in contrast to the previous range of 17-19%.
Net profit rose 24.4% quarter-on-quarter to 2,372 crores. And margins went up to 31.2% from 28.16% in the quarter before. Infosys’ numbers were helped along by a 7.36% depreciation of the rupee during the quarter, a factor that caused the firm’s rupee revenue to shoot up. Meanwhile Infosys CFO V. Balakrishnan said that even if clients slashed their I-T budgets in the coming months, outsourcing budgets were more likely to stay intact.
Also in earnings, India’s biggest mortgage lender has reported profits, but has still fallen short of expectations. HDFC posted a 10% rise in net profit to Rs981 crores on a year-on-year basis. Meanwhile its loan book expanded 21% to Rs1.32 trillion. And net interest income went up 18% to Rs1,235 crores, while net interest margin was at a stable 4.3%.
In other news, single brand retailers from overseas will now be able to fully own their Indian operations. On Tuesday the government notified its decision to allow 100% FDI in single brand retail. The move could encourage luxury brands to set up shop in India-- along with other chains like furniture retailers. Back in November the cabinet approved 51% FDI in multi-brand retail, but had to put that decision on hold after strong political opposition.
Back in corporate, Infrastructure Development Finance Company is planning to raise a fortune overseas. The company is applying to issue $1.5 billion worth of medium term notes on the Singapore Stock Exchange. IDFC says it has already received approval for the plan. The company’s senior director, resources, S.J. Balesh says the MTN programme will help it diversify its liabilities. MTNs will allow a firm to raise money in multiple stages rather than at one go.
And there’s good news for India’s economy. New data shows industrial output has rebounded in November after dropping into negative territory the previous month. The index of industrial production stood at 5.9% in November. The revised figure for October shows a fall of 4.7%. November’s IIP is highest since June. And it’s also better than most street estimates. Still, the index is known for its volatility and may not be seen as a sure indicator of broader economic revival.
Food inflation remained in negative territory in the last week of December. India’s food price index fell 2.9% in the period to 31 December. The previous week it was even lower at minus 3.36%.