After Tata Consultancy Services Ltd’s (TCS) weak performance in the June quarter, Infosys Ltd’s results came as a relief for investors. Its revenues grew 2.7% in constant currency terms, in line with analysts’ estimates, while profit margins were far ahead of the Street’s expectations. TCS disappointed on both revenues and margins.

Infosys shares rose 3% in early trading, even while TCS fell by nearly as much. While the latter’s shares, understandably, continue to be under pressure, Infosys’s shares have given up most of their gains. After all, while the company’s reported profit may be more than what analysts had estimated, nothing material has changed on the ground.

At the end of the day, growth in the core business remains sluggish. As the chart alongside shows, year-on-year volume growth has fallen below the levels it stood at when Vishal Sikka had taken over as chief executive officer. According to an analyst at a multinational brokerage, it’s likely the half decent June quarter numbers were boosted by the GST (goods and services tax) project being handled by the company. Growth in core markets, he says, was far more subdued. For instance, growth in North America stood at just 1.3% sequentially, far lower than the company average.

No doubt, the company did far better than expectations on the profitability front. Analysts at Kotak Institutional Equities, for instance, had estimated margins to decline by around 100 basis points owing to the appreciation in the rupee and visa costs. But thanks to a jump in employee utilisation rates, margins fell by only around 60 basis points.

But again, there is a limit to how much margins can inch up owing to better utilisation. The above-mentioned analyst said gains on this count are limited considering the company is already at utilisation rates of 84% excluding trainees.

More importantly, despite the earnings beat (vis-a-vis expectations), the fact remains that growth in trailing 12-month profit stood at merely 4.9% at the end of the June quarter. As the chart alongside shows, this is among the lowest rates at which the company has grown profits in the past three years.

All told, there’s not much to get excited about Infosys’s results. To be sure, they are better than TCS’s numbers, and to that extent come as a relief. But there are hardly any signs of a recovery or a return to double-digit growth.